Travel tips: The smart traveller’s guide to taking money abroad
It’s becoming summer in the northern hemisphere, which means that all those holiday destinations that were too cold to visit over the December holiday period will soon be warm enough to welcome visitors from all over the world. But leisure makes up just a small fraction of international travel these days. Thanks to globalisation and technology making the world smaller, most people are travelling for business rather than pleasure (or, with a bit of luck, a healthy combination of the two).
Whatever your reason for travelling, you’ll be needing money. It takes a fair amount of preparation to ensure that a business or holiday trip runs smoothly when it comes to finances. But planning doesn’t have to be stressful. With a few smart moves you can take money with you across the globe with ease. Read on for our quick and simple financial planning travel tips that will give you the peace of mind of a local no matter where you are.
Contact your bank and credit card provider before you leave
As soon as all your flights and accommodation is booked, the next thing you should probably do is call you bank and inform them of your travel plans. Keep them in the loop about as much as you can regarding where you will be going, how long you will be staying and even how much you estimate that you will be spending while you are there. Your credit card provider, if they happen to be separate from your bank, would need this information too.
All banks and financial institutions are different, and as counter-fraud security measures become more intelligent, banks might not even need you to notify them of your international travelling plans. But until then it’s best to stay on the safe side of things and get that one phone call over with. Because the alternative of having your account frozen for suspicious activity while you’re overseas is an inconvenience you don’t want to be dealing with while away.
Bring along the card that has the lowest or no foreign currency transaction fee
It’s widely believed that the best card to take with you when travelling internationally is a credit card. This may be true, but when you have more than one type of credit card which one do you bring so that you don’t have to carry them all?
Whenever you spend money outside of your country there’s a high chance that you’ll be paying a little bit extra than the locals. That’s because of foreign transaction fees that your bank tacks on for converting your money into local currency. Were you aware that different credit cards carry different foreign transaction fees? Some, if you’re lucky, don’t carry any foreign currency transactions fees at all. The general rule is that Visa and Mastercard are the most forgiving, but this can vary depending on the country you’re from, the type of bank account you have and so on. This is something else you can discuss during your pre-trip call with the bank.
Choose Chip-and-PIN over magnetic stripe every time
Magnetic stripe cards are quickly going the way of the chequebook. Card processing security standards have evolved and they’ve forced our bank cards to evolve along with them. Chip-and-PIN cards are the new standard because they’re more secure than magnetic stripe cards. Unlike magnetic stripe cards, chip-and-PIN cards are embedded with microchips that store account and user information (the information is encrypted and assigned a random once-off string of characters during transactions through a process called tokenisation. The four-digit PIN, known only to the cardholder, provides an extra layer of protection for the information stored on the card.
To make sure that all your transactions abroad are secure, make the switch from magnetic stripe to chip-and-PIN ahead of your trip.
Stick to cash as far as possible
Sure, credit cards are quite convenient for travelling, but you’re still spending the bank’s money and not your own at the end of the day. If the idea of incurring debt in a different land with a different currency bothers you then you might have to fall back on legal tender. The beauty of cash is that it is still the easiest way to transact; no other method of payment can quite compete with the immediate recognisability of banknotes and coins as units of exchange.
Speak to your banker about your ATM options when travelling overseas. If your bank is part of the Global ATM Alliance you would be able to use a partnered ATM while travelling and pay withdrawal fees that are competitively negotiated by your bank back home (these fees can sometimes be very close to zero). You might not want to carry any cash when travelling for safety reasons, but it really is the payment method that makes the most sense. Cash helps you track and limit your spending, and it’s also globally understood, which can be very useful in a foreign land.
While travelling keep an eye out for ATMs at transport interchanges. ATMs are strategically placed to serve people where they need cash the most, so from the airport to the train station and at every transport node in between you should be able to find at least one ATM for you to replenish your cash stock.
If you happen to find yourself overseas for business, you could probably use a few of the tips in our ebook on Gearing Your SME for Long-Term Success.