Traveling abroad is a chance for excitement, adventure, and fun. But it can quickly turn into an expensive nightmare if you’re not properly prepared. Whether you’re traveling for work or vacation, it’s important to protect your money. Here are four tips you can use to make the most of your trip and keep your money safe:
Using credit is a great way to protect your money while traveling abroad because there is a stopgap between when a charge is made and when the money is withdrawn from your account. If your card is lost or stolen while traveling, you can report any unauthorized purchases to your credit card company and save yourself from losing money.
Before traveling, be sure your cards are approved to work internationally and that they do not involve hefty foreign transaction fees. Ideally, you’ll want to use a credit card with no foreign transaction fees. It’s also a good idea to bring more than one credit card with you and keep them in different places, such as one in your wallet and another in your suitcase. That way, you’ll still have access to credit even if your wallet is stolen or your luggage is lost.
Don’t Bring a Lot of Cash
While we recommend primarily using credit when you travel, you’ll want to have some cash on hand if you find yourself in a situation where credit is not accepted. Plus, depending on where you’re traveling, there may be limited access to the internet or other infrastructures that credit and debit cards rely on to operate.
You’ll want to be sure not to carry too much cash. And, if you do end up withdrawing large sums, store your money in separate locations to minimize potential loss. It’s often recommended to carry about $200 in cash on you, but even that amount should be held in different places on your person (e.g., $50 in your pocket, $50 in your bag, $50 in your sock, $50 in your money belt).
And, if you find that you need to withdraw cash while abroad, be sure to use an ATM that is in a safe, well-lit, and highly populated area. It may sound like common sense, but don’t go to an ATM off the beaten path and avoid withdrawing money at night, if at all possible.
Understand Exchange Rate Fees
Safeguarding your money while traveling isn’t just about minimizing your risk of theft; it also involves protecting your money from unnecessary fees. Understanding the exchange rate and the associated costs for purchases made in the country you’re visiting is a great way to reduce and prepare for expenses.
Be sure to research the current exchange rates leading up to the trip and once you are there. Knowing the exchange rate ahead of time will help you stay informed and prevent you from being taken advantage of by money changers who may try to needlessly upcharge you.
You may also find that the exchange fee is particularly high for your trip, so it might be smarter to use less cash and stick to credit instead.
Tell Your Bank(s) Where You’re Going
Lastly, tell your bank(s) where you’re traveling ahead of time, so they don’t freeze your account(s) for suspected fraud. Let them know exactly where you will be, and which dates you are going to reduce any chance of being in a foreign country with no access to your money. The last thing you want is to have to call your bank to prove the validity of your charges while dealing with jet lag, time changes, and potential language barriers.
Eric Braund is the Founder and Chief Financial Officer at Black Walnut Wealth Management, a financial advisory firm providing financial counsel and fiduciary investment services to individuals, families, and private foundations throughout the Traverse City and Northern Michigan region. He is a CERTIFIED FINANCIAL PLANNER™ professional and a Chartered Retirement Planning Counselor™ with 25 years of experience. He also has a bachelor’s degree in finance from Hillsdale College. Braund is passionate about offering services rooted in hard facts and sound reasoning combined with meaningful, long-term relationships so that his clients can experience less stress and have more time and energy to invest in what they love.
Braund is a Northern Michigan native who truly enjoys all that the area offers, including hiking, biking, swimming, skiing, volleyball, and boating. He loves spending time with his family — his wife, Jodi, and his two children — and maintaining a balanced life. To learn more about Eric Braund, connect with him on LinkedIn.
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