When we travel abroad, it seems like there is always a hidden threat out to get us. While most problems come in the form of illness or scams, this one is a quiet one, only coming out to get us when we least expect it. And when it does arrive, many don’t even know it has struck until it’s too late.
That hidden threat I am addressing is my favorite four-letter f-word: fees. When outside of the United States, inserting the chip in a foreign credit card machine can cost two percent more, while using an ATM can add three to five percent more (not counting any bank fees your institution may add). And don’t even think about trying to get foreign currency at the airport or a tourist kiosk, because they are notorious for driving up the cost of transaction fees.
Is it entirely possible to avoid fees while traveling? Although it can be difficult, you can minimize your risk of losing your money to the bank with these three easy-to-do steps.
Don’t exchange money in high-traffic areas
Before you board the airplane, it may be tempting to stop at the airport kiosk advertising today’s exchange rates to get a little foreign cash.Just because the advertising says they have the best deals doesn’t mean they are actually the best prices for currency exchange.
In fact, these places often inflate the exchange rate with exorbitant hidden fees after you have begun your transaction. As a result, you will get a lot less international currency that you originally wanted. At one very popular name in currency exchange, their rates for Dollars to Euros was nearly ten cents lower than the best rate available. While it may not sound like much, it can make the difference of 90 Euros when exchanging $1,000.
Instead of waiting until the airport or going to a tourist kiosk, your best bet is always at a bank. As a general rule, banks offer better exchange rates and lower fees than retail exchanges. If a bank is not available (Spain is notorious for having odd bank hours and long waits), then there’s no shame in using an ATM with the right debit card (more on that below).
Use credit cards with no international transaction fees
Another option to save on international transaction fees while abroad is to primarily use credit cards with no international fees. Many cards marketed towards international travelers don’t add any fees when they are used around the world, giving them a little more peace of mind when they see the American Express, MasterCard or Visa logo.
Some of our favorite credit cards without foreign transaction fees include the Chase Sapphire Preferred, the Wyndham Rewards Visa Card, and the Uber Visa Card. It’s important to note that not all cards with no international transaction fee comes with an annual fee. The Capital One VentureOne Rewards Credit Card has no annual fee, no international transaction fee and allows you to effectively earn 1.25 cents cash back towards travel purchases.
Be careful on how you use your debit cards
In the past, I’ve talked about developing a travel savings account to dedicate cash towards your next adventure. To those means, I’ve set aside money in another bank account that has no international transaction fees while using the debit card abroad – so long as I inform the bank of my travel plans ahead of time.
Two checking accounts that have no international transaction fees abroad are the Capital One 360 Checking Account and the Schwab High Yield Investor Checking Account. Both the Capital One 360 and Schwab High Yield offer unlimited ATM fee rebates and no international transaction fees, the Schwab High Yield account requires you to have a Schwab One account open and active.
How do you avoid fees when you travel abroad? Let me know your thoughts in the comments below!
Written by Frugal Travel Guy @ https://www.frugaltravelguy.com
Written by Frugal Travel Guy @ https://www.frugaltravelguy.com