You’ve been diligent about saving. You found the cheapest flight and hotel but the task of managing money is far from over. Don’t arrive home to find out your cheap trip ended up being not so cheap at all.
To stay on track be aware of these common money mistakes:
1) Not telling your bank about your trip
I have met so many people stranded without money because their bank was diligently avoiding fraud by freezing their account when they saw unusual activity.
I always call my bank and credit card company to let them know the dates I will be gone and where I will be.
Take it one step further: Get the direct line and email of one of your bank representatives. I landed in Cancun to find out that I had no access to my bank account. Thankfully when I called my bank representative who was able to activate the account on the spot.
Beautiful beaches but Cancun is no fun without cash. Photo by jthetsel
2) Using a small bank without international partnerships
Credit unions and small private banks are great until you try to get money out and the small town you are in doesn’t have a bank that can connect to yours.
Before you leave find out if your bank is connected to an international network.
Take it one step further: Bring debit cards from 2 banks, that way if one isn’t not recognized you have a second banking option.
3) Carrying Travelers Checks
I cannot tell you how many people I have met who have been saddled with traveler’s cheques they cannot use.
If you are not in a developed country you will have difficulty cashing them in and the fees are ludicrous.
4) Not checking into bank fees
I went to South East Asia and loved that I could just take money out whenever I wanted. When I returned home I found out my bank had charged me $5 for each withdrawal plus a currency conversion fee.
I had racked up another $100 in fees! So much for South East Asia being cheap. With a simple call to the bank I would have realized I should take out the maximum each time to minimize fees.
Take it one step further: Some banks have international agreements where you can use other ATMs for free. Find out if your bank has this agreement.
ATM fees aren’t the only thing that can be dizzying in Thailand
5) Using your credit cards at ATMs
If ATM cards are money grabbers it seems natural to want to use your credit card. Not so fast.
It is technically a cash advance. The fee is usually $2-5 so less than an ATM but there is a catch.
You don’t have a grace period to pay it back and highest interest rate kicks in the day after you take the money out, often at a much higher interest rate.
Get around it: if you carry no balance on your card you can take money out and then head to online banking to transfer the money, but if you are not diligent about this you will pay outrageous fees. You may also be able to prepay on your visa to avoid interest.
Using your credit card at ATMs can result in huge interest fees. Photo by Tim Moffatt.
6) Paying with your credit card
In many countries it seems smart to pay for large bills with Visa, but you need to find out first if the vendor charges a credit card fee.
Fortunately the tour operator was honest and explained fees were lower at the ATMs. Unfortunately people buying $1000 tours were unknowingly spending $60 in credit card fees.
Happy to have saved a 6% credit card fee on my hike to Machu Picchu.
7) Charging your credit card in Dollars
It is very common to be asked if you want your credit card to be charged in dollars (dynamic currency conversion) or the local currency, especially at hotels or high-end restaurants.
Makes sense to be billed in dollars right? Wrong.
The credit card bill will arrive with a high rate of conversion and the vendor can choose whatever rate of conversion they want to use. On top of that your credit card can still charge its 1-3 percent foreign transaction fee.
8) Exchanging money at the airport
You arrive at your location excited, tired and just wanting to get into town.
Do not go to the money changer at the airport kiosk. They make their money by giving a very bad exchange rate or charging an exorbitant fee.
If you don’t have local currency ask where you can find an ATM. There is usually one around the departures section next to the restaurants.
Don’t get tricked into high fees and bad conversion rates at the airport! Photo by Alan Levine
Have you been stung by any of these money mistakes? Let me know in the comments.
If you liked this, you might also like: 6 Money Lessons I learned Whilst Traveling.
Main image: International money by epSos.de