8 Tips to Avoid Money Pitfalls When Traveling Abroad
It all started with a craving for Dunkin’Donuts. We don’t have any in France. So when I travel abroad, this is my little weakness. I always enter the store with a dancing heart and a smiling belly, and I order the box of 6. Yes, just for me.
For my 18th birthday, my parents offered me a 5-day trip to Stockholm with my then girlfriend. We were thrilled. So, right after we arrived, and even before dropping off our suitcases at the hotel, we decided to celebrate with this special treat.
We chose the 6 that looked the most delicious — yes, this time I agreed to share — and took out our Swedish crowns to pay.
The employee stared at the banknotes.
- “Something’s wrong?” I asked her.
- “Actually, yes. It’s not Swedish money,” she replied.
I felt my heart miss a beat.
When we made the currency change at the airport, we were given Czech crowns. At the exchange rate of Swedish crowns. So we had just lost $400. And we found nothing better than to make things worse by going to exchange these Czech crowns for Swedish crowns, before quickly turning back and realizing our foolishness.
Fortunately, my father had lent me his credit card for the trip. Perhaps he had sensed something…
This is only one of the many money-related problems that happened to me abroad. We laugh about it later, but at the time, it’s anything but funny. Fortunately, experience is the best instructor. Now that I’m traveling full time, I’ve put together a few tips on how to manage your money abroad, which are as follows.
1. Exchange currencies BEFORE leaving
Sometimes we leave without local money, planning to withdraw it upon arrival.
Two days ago, for some reason I don’t know, my withdrawal was refused. I’ve also heard about people whose credit cards got stuck in the machine. Imagine the situation: you find yourself without money, without your card, in an unknown country.
You don’t want that to happen.
My now strategy is the following: I change more or less $200 before leaving (making sure it’s the right currency). You can order the money from your bank, which is the safest way to do it, or go to a change agency. Plan to do this at least one week before departure, as they do not always have all the currencies on hand.
I arrive abroad with enough money to take a cab if necessary, and to get food and water if my credit card doesn’t work. Then, I don’t make change but withdraw cash when I need it.
2. Don’t withdraw money from the first ATM you see
It depends on the country in which you travel, but unfortunately it’s not uncommon for some ATMs to be traps. They record your pin and someone steals your card, or things like that.
Only withdraw money from bank ATMs. Never from a random ATM on a street.
It’s a golden rule.
3. Avoid credit card fees
Depending on your bank, you will probably have to pay fees if you use your card in a foreign country. It’s usually not much, a few cents here and there. But at the end of the trip, it adds up to tens of dollars or more just for using your card for a week, when you could have used it to eat out or do an activity.
I have a tip for that. It was recommended to me by my own bank. It’s called Revolut. I’m not affiliated with them at all, I just have to share this trick because it has become my superpower.
It’s an online bank that works all over the world. You can open an account for free (here’s my referral link and more informations, in case you’re interested), and in no time you’ll receive a rainbow card with your name and a personalized pin. This card works with an app and an account in your name. You can instantly transfer money from your regular bank account to it, at no cost, and then use this card to pay anywhere, again at no cost.
The features are numerous: they offer insurance, crypto-money, etc.
It feels like a secret power when I see everyone pay fees, and I literally pay for everything with this card, even my 30 cent bottles of water, because I know it won’t cost anything. You can also pay online with it. And the good thing is that if it’s stolen or lost, you don’t have all your money on it, and you can block it instantly and easily from the application. What’s more, you get a notification telling you how much you paid, and they even convert it into your currency.
4. Inform your bank of your travel plans
Speaking of banks, be sure to send them a quick email to inform them of your travel plans. If they detect that your card has been used abroad, they may wonder what’s going on and block it.
Avoid this by letting them know, they are there for you.
5. Plan your cash withdrawals in advance
The other day I wanted to rent a car and I got stuck because I couldn’t withdraw enough money to pay for the deposit.
It is best not to carry too much money with you. You never know what can happen. But if you expect to need a certain amount of money, plan ahead. Indeed, in most countries, when you are a foreigner, you can only withdraw a limited amount per day.
You don’t want to get stuck because you can’t get your hands on your own money. So plan to withdraw every day a few days in advance, so that you get the right amount on the right day.
6. But don’t keep all your eggs in the same basket
I have 4 baskets actually. My Revolut card. My normal credit card. And cash divided in two parts. If you put everything in your purse and lose it or have it stolen, you end up with nothing. That’s usually what you don’t want to happen.
It’s best to keep a credit card in your hotel room or Airbnb, and take one with you. And distribute your cash the same way. Preferably, don’t put cash and credit card in the same bag. One in your pocket and one in your bag for example.
Always plan for the worst while expecting the best.
7. Pay by card as often as possible
If you don’t have any fees, I advise you to make card payment your default method. There are several reasons for this.
First, it’s easier. No cash, no change, just your contactless card, beep!, done.
Second, it avoids having to count. Stupid little story: I bought a bottle of water with cash the other day. It cost something like 30 cents. I gave the equivalent of 1$, and they tricked me with the change. I ended up paying the price of two bottles of water. I was too lazy to come back for a few cents, plus it was my fault, I should have checked the change. To make a long story short: by paying by card, you avoid having to pay attention to the change.
Third: it leaves a trace. It is easier to find solutions to a money problem when you have a trace on your account, rather than when you paid in cash.
Finally, it saves your cash, so you don’t have to withdraw money all the time. And it’s better to have a bank card stolen or lost, which you can block, than a wad of bills. Provided that you have two credit cards, of course.
8. Use an app to convert currencies
Money in another currency doesn’t sound the same in our minds. How many times have I come home with a new purchase that I thought was pretty cheap, only to find that I actually paid a lot for it.
Doing the math can sometimes lead to mistakes, and staring at the numbers in another currency doesn’t give many clues as to the real price of the thing you want to buy.
I downloaded an app that works offline — since I don’t pay for the data abroad. All I have to do is type in the amount, and it converts approximately into the right currency. Mine is free — but with ads — and it’s called “Devises”, but you can find many on your iOS or Android app store.
Also try to memorize the equivalent of $1 in the currency of the country you are in. Math is easier that way, and you don’t always need to open the app.
Managing your money abroad can be tricky, especially if you are not used to traveling. I hope these tips and tricks will be useful to you. I use them daily, and I’ve found that they work pretty well.
You don’t want to find yourself with money problems abroad. So always be careful and attentive, and make sure that you actually manage your money, not let it manage you.