The Dos and Don’ts to Avoid Foreign Transaction Fees When Traveling Abroad! Tasmiah Rashid January 25, 2018 Travel Tips When it comes to trying to save yourself from those measly foreign transaction fees that rack up while you’re globetrotting, there are some definite dos… and some definite don’ts. We’re all about saving you every pretty penny possible so that you can spend your hard-earned money on experiencing your destination just the way you dreamed you would — and not on nightmarish fees! Here’s our list of Do’s and Don’ts on how to avoid credit card and bank fees while you’re abroad. Happy saving! Do: Exchange Your Money Before Boarding the Plane Yes – This sounds daunting. Carrying hundreds of yen, euros, rupees, or whatever currency you’re converting your dollars to, is not something that’s easy on the nerves. But trust us when we say, this is one of the best-kept secrets of money-saving tips out there. For example, transport to and from the airport via taxi is usually pricey and if you’re taking an Uber, chances are you’re about to rack up quite the sum of transaction fees on your credit card. Having some local currency handy once you’ve landed will not only allow you to grab a cab to avoid using your credit card, but it’ll also save you quite a few initial trips to the ATM — and all those withdrawal fees– as well! Did you know? Roughly 90% of credit cards charge foreign/international transaction fees. Depending on where you are and what credit card you’re carrying, fee percentages can be as high as 7% on every transaction! Do: Look Up Which Banks Are Closest to Where You’re Staying You’re likely to pay a visit or two (or 7) to an ATM for some cash while you’re abroad and those ATM fees can add up quickly! Withdrawal fees vary from bank to bank, but what you probably didn’t know is that they also vary from location to location — especially if you’re using a non-bank ATM. Try your best to find a bank ATM. These usually have the least expensive withdrawal fees and give you the best conversion rate, too. To save yourself even more mula, give your bank a call or check their website to find out if your bank is a member of the Global ATM Network — a network of banks that have come together to offer waived fees and/or allow free ATM withdrawals. Even if they’re not a member, ask if they have any alliances with banks abroad. By using partner ATMs you can avoid ATM charges or at the least pay a much lesser fee. Do: Your Research! More and more credit card companies are offering credit cards that don’t charge fees on international transactions (hooray!), but even these cards have their limitations. If you’re an avid traveler, or even just the occasional one (that loves to shop, wherever you go) saving money on your purchases abroad is something that you can easily accomplish, as long as you do some solid research. Companies such as American Express, Discover, and Chase offer credit cards that have no foreign fees. Give your bank or credit card company a call, or check out their website to find out what your options are. You’ll thank yourself (and us) when you’re soaking in the satisfaction of swiping your plastic, worry-free. Don’t: Exchange Your Money at the Airport! Even if you reject the rest of our advice, this is one we can’t stress enough! We know that exchanging money is an essential part of travel, and an airport terminal seems like the most convenient place to do it, but just remember that you’re going to have to pay a significant chunk of change for that convenience. Most airport exchange bureaus have very little clout when it comes to competitive exchange rates. The rates you see at airports are always the worst ones you’ll find, so unless you absolutely have to, avoid exchanging your money here at all costs (ba-dum-tsss)! Don’t: Forget to Remind Your Credit Card Company of Your Travel Plans This one’s for you, oh forgetful one. Not informing your credit card company and/or bank might leave you in a tight spot while you’re abroad. If your transaction is marked as fraudulent, your card might get suspended, but even more importantly this may mean you’ll have to rely on your cash. While this might not be an issue if you have enough exchanged money on you, it may present a wee bit of a problem if you only have U.S. dollars on you, especially in smaller shops or boutiques where they only accept local currency. It might also force you to make an extra ATM trip (meaning more withdrawal fees), if you weren’t planning on using it for that particular purchase. Don’t: Opt for a Dynamic Currency Conversion Say what??? When shopping abroad, the cashier or store merchant may ask you if you want to convert your credit card transaction from the local currency into U.S. dollars… a.k.a. Dynamic Currency Conversion (DCC). Seeing your purchase cost in $$ might sound like an enticing offer, but we have one piece of advice for you: fight the temptation… never say yes! While it may seem like this a way for you to avoid transaction fees, it’s actually quite the contrary; this is a pretty pricey conversion and will cost you an extra 5%-7% conversion fee in addition to the 3% foreign transaction fee that most credit cards are already likely to charge you. Yikes! Pro-tip: If you’re on a really tight budget and/or need to keep a close eye on your spending while traveling, carve out a budget before your trip and exchange what you need in one go. Going cash-only on your trip will allow you to avoid all extra fees, except for the initial one for your exchange, while also saving you from the stress of whether or not the merchant will accept U.S. dollars or your credit card; you’ll have local currency, ready to go! Not to mention, keeping track of your expenses will just be a matter of some simple math. Have any money-saving advice about foreign transaction fees? Share your tips with the world in the comments below!
