Wayfarers All

After a harsh learning experience in a previous life, I no longer use credit cards; personally, unless you pay a card off every month, the downside to credit cards definitely outweighs the upside (admittedly, they do have their uses when making large purchases but that’s a different blog).

Still, no matter whether you choose a debit or credit card for your travels, choosing the right card can save you quite a bit of money.

When I first began to travel outside the United States, I was stunned by the fees charged on purchases beyond US borders.  These fees began even before I left the country – paying for a course or a B&B often triggered currency exchange rates and fees on those rates that ran to 3% and more of the cost of whatever good or service I was buying.  My bank also charged hefty fees if I bought foreign currency before I left the country.  Something as simple as getting cash from an ATM also gave me sticker shock – and I’m not just talking about the fee for using a machine outside of your bank’s network but the currency exchange fees that will be added on top of the out of network fees.

Double check current policies with your bank(s) before leaving the country.  Fees, exchange rates and service policies – particularly in the current economic climate – are always subject to change.  Make your decisions based upon your individual relationship with your bank, however, these are a few general tips I’ve picked up during my travels:

- Alert your bank that you will be travelling outside the country.  Tell the bank representative the dates of your travel and your destinations including airport stopovers.  My bank will generally let the first transaction outside of the country slide by but the second transaction sets off a security alert which can be embarrassing.  Imagine having your debit or charge refused at a restaurant or when you check out of your hotel.  In addition, be sure you know the “outside of the United States” contact number for your bank, it is usually on the back of your card.  All of the foreign contact information for my cards has been entered into my BlackBerry (or as it is known in my house, my Annoying Berry).

- Find out if your bank has partner banks in other countries; for instance, Bank of America has partnerships with Barclays in England and China Construction Bank in Hong Kong.  There are no currency exchange fees or out of network fees for using Barclays and China Construction Bank ATMs when you use a B of  A debit or credit card to get money out of your account.  HSBC is also a good card to carry when travelling.

- Wait until you get to your destination to buy that country’s currency; this means if you visit a country frequently you should save a little money for your next trip back.  I visit England several times a year and always save a ten pound note for the return trip, that way when I land at a British airport, I have enough money to take a train or the Underground to a stop near a Barclays Bank; the same is true when I visit Hong Kong, I always keep 100 HK dollars in reserve for a return visit.  If you buy an Oyster card for travel in England or an Octopus card for travel in Hong Kong, you can also leave enough credit on it for a trip to a friendly ATM location.

- Carry cash and pay cash.  Many bed & breakfasts in England prefer cash and some refuse cards altogether; those that do accept cards may charge fees regardless of the type or brand of card you use.  In addition, smaller towns may not have ATMs that are convenient, safe or globally branded.   Yes, I know carrying cash is a security risk but approached sensibly this risk can be greatly lessened.  The same rules apply for carrying cash in foreign countries as apply for carrying cash in the United States.  Don’t flaunt a big bank roll.  Carry small denominations and don’t put all your cash in your purse or wallet.  Take care when using ATMs, avoid taking out cash at night, try to use one on a busy, well lit street.

- Be particularly wary of using stand alone ATMs (these are often found in rural areas and/or in businesses that don’t accept debit/credit cards).  The fees and currency exchange rates charged by these ATMs can be exorbitant and will be on top of any fees charged by your home bank for using an out of network machine.

- Use different cards for different services.  I carry a PayPal debit card for business use; if I buy goods or services online, there is rarely a transaction fee and when there is one, it is minuscule; however, the vast majority of ATMs charge a minimum of $3.00 for a withdrawal made with a PayPal debit card so I never use it for withdrawing cash.

- Just as you would at home, protect your cards.  Be wary of using them online in public places and even when in your hotel room.  Ask for receipts for all purchases and keep them until you have settled accounts upon your return.

Debit and credit card fees and currency exchange rates can add tens, even hundreds, of dollars to your travel expenses.  A little bit of knowledge and thought before you leave the country can help stretch your travel dollars to the max.

And, oh yes, that’s just a random chicken…