Traveling should be fun and/or relaxing. Financial headaches can destroy a trip in a hurry. Before heading out, make sure not to make any of these financial mistakes:
1. Not Telling Your Bank about Your Trip
You should always notify your bank before leaving. This is especially true if you’re traveling overseas. Sometimes banks or credit card companies will see foreign transactions and think someone stole your card. The worst case scenario is that they’ll cancel your card. How would you like that surprise when trying to buy something in a foreign land?! You don’t want to be vacationing somewhere and accidentally learn that your card is worth nothing more than thin sheet of plastic. That would be an expensive call to the US to get it reactivated.
2. Using Traveler’s Checks
While some places do take traveler’s checks, they’re not a very common in 2015. Some banks have very stringent rules on cashing them, so it’s difficult for businesses to deposit them. Thus a lot of places, both domestically and internationally, refuse to accept them. While they may be great to use as a backup in case your cash or cards are stolen, don’t rely on them.
3. Not Checking Bank Fees
Some banks have outrageous fees if you use your card outside your normal geographical area. Many of these fees are ATM fees. While a $5 fee might not seem like a lot, it can be avoided. If you use your card at least five times a day, at $5 a swipe, that’s $25 just for accessing your money. Before you travel, take a look at free-to-use ATMs where you will be traveling.
4. Not Checking Currency Conversion Fees
When traveling internationally, a lot of people forget that banks or credit card companies charge an additional currency conversion fee. Some companies not only charge a conversion fee, but they’ll charge a secondary fee just because you used your card internationally. Fees can be as high as 10%. That’s a lot of unnecessary expenses. If possible, try to find a bank that has a no fee guarantee.
5. Exchanging Money at the Airport
When you’re planning a trip, sometimes you forget to change over your money. Naturally, a lot of airports have currency conversion stations where you can exchange money. However, the exchange rates at these stations charge hefty fees. Instead, go to a bank where you can get the proper exchange rate for your currency. Just make sure you have enough local currency to get you to a bank.
6. Not Having a Bank with an International Partner
While most large, corporate banks and credit card companies have international partners, smaller banks or credit unions might not. You always want to make sure that your bank has an international partner. An international partner will save you money overseas.
7. Not Carrying Cash
It’s easy to assume that everyone takes credit or debit cards, but there are still a lot of places that don’t accept these payment methods. It’s always smart to carry some cash on you in case of emergencies. What if you go to a restaurant that is cash only? Or how about a small market that doesn’t accept cards? You don’t want to encounter a situation where you can’t pay. That’s awkward for everyone involved. Instead, make sure you have some local currency tucked away for emergencies.
8. Charging in Dollars
When overseas, many stores will ask if you want your card to be charged with the local currency amount or in US dollars. Many people choose to be billed in dollars since they think it will save them money. Except the vendor can still choose to slap you with a high conversion rate as well as an international transaction fee. If you’re unsure about this, check with your bank to see what the best method is for charged amounts.
9. Bring Small Bills
It might be easier to carry large bills around since that means fewer bills to tote around. But there are a lot of people who refuse to make change for large bills. Sometimes it’s a vendor’s way of cheating you out of money. For instance, if you take a cab somewhere and the amount (in US dollars) comes to $5 and you only have a $50, the vendor could tell you that they don’t have any change. You don’t want to be stuck leaving them a $45 tip, do you?
10. Using Your Credit Card at the ATM
Using your credit card at an ATM is never a good idea. This counts as a cash advance. Interest rates for cash advances are usually much higher than regular interest rates. Additionally, you’re going to get hit with a normal ATM fee on top of that, and if you’re traveling internationally, you’ll get another currency fee.
Make sure you know how you will get access to your money when traveling. Then you can simply think about relaxing and having fun while on vacation. After all, most people don’t want to worry about money while away.