Keep your money working for the trip
Money abroad is not complicated, but it is full of small charges that quietly stack up. The travelers who handle it best are not the ones with a secret card. They are the ones who understand a handful of common fees and arrange things in advance to avoid them. This page explains how the system works so you can do the same.
Foreign transaction fees: the first thing to check
Plenty of credit and debit cards add a foreign transaction fee, a percentage charged on every purchase you make outside your home country. Each charge looks small on its own. Across a whole trip, it becomes a quiet tax on everything you spend.
Here is the good news. A number of cards charge no foreign transaction fee at all. The single most useful thing you can do before a trip is check your existing cards, work out which ones are free to use abroad, and plan to use those. Card terms change over time, so check your current cardholder agreement or simply ask your card issuer rather than relying on memory.
Ring the number on the back of each card and ask two things. "Does this card charge a foreign transaction fee?" And "will it work where I am traveling?" Five minutes on the phone can save you more than any other money preparation you do.
Cards or cash? Carry both
The sensible approach is not to choose between cards and cash. It is to carry both and use each for what it does well.
Cards
A no-foreign-fee credit card is usually the best way to pay for hotels, restaurants, larger purchases, and most transactions in developed destinations. Credit cards also come with fraud protection that cash cannot offer, which matters if a card goes missing or is compromised.
Cash
You will still want some local currency for small vendors, tips, local transport, markets, and anywhere that does not take cards. Carry enough to be comfortable, but not so much that losing your wallet turns into a disaster.
Using ATMs abroad sensibly
For most travelers, withdrawing local currency from an ATM after you arrive gives a fair exchange rate, usually better than an airport exchange kiosk or carrying a pile of cash from home. A few habits make it safer and cheaper:
- Use ATMs attached to actual banks where you can, inside or on the wall of a branch, rather than standalone machines in tourist areas, which more often pile on fees.
- Check your own bank's overseas and out-of-network ATM fees before you travel, so nothing surprises you.
- Withdraw a sensible amount in one go rather than making lots of small withdrawals, since per-withdrawal fees add up. Never more cash than you are comfortable carrying, though.
- Shield the keypad and stay aware of your surroundings, exactly as you would at home.
The dynamic currency conversion trap
This is the most common avoidable mistake, and it is worth knowing by name. At a shop, a restaurant, or an ATM abroad, the card machine may ask whether you want to be charged in your home currency or the local currency. Being charged in your home currency, a practice called dynamic currency conversion, sounds convenient. The exchange rate applied is usually poor, and it costs you more.
When a payment machine or an ATM gives you the choice, choose to be charged in the local currency of the country you are in. Let your own card's network handle the conversion. It almost always gives a better rate than the merchant's machine.
A short money checklist before you go
- Identify your no-foreign-fee card and plan to use it as your main card abroad.
- Tell your card issuers and bank your travel dates and destinations, so a real overseas purchase is not flagged and frozen.
- Carry at least two cards, stored separately, so a lost or blocked card is an inconvenience rather than an emergency.
- Note the customer-service numbers for your cards and keep them somewhere other than your wallet.
- Get a little local currency for arrival day, enough for transport and a meal until you reach an ATM.
- Check ATM and foreign transaction fees with your own bank so you know what to expect.
A few minutes now, money saved later
Handling money abroad well comes down to a few reliable habits. Use a card with no foreign transaction fee. Carry a second card stored somewhere separate. Withdraw cash from bank ATMs. Choose the local currency whenever a machine asks. None of it is difficult. It just has to be sorted before you leave, and once it is, more of your budget stays where it belongs, in your trip.