TRAVEL TIPS: Money Management While Away From Home

Money…it not only makes the world go around, it’s the power behind your vacation.  We’re going to do a couple of Travel Tips about it. First, how to manage it during your trip.

Most people by now, but by no means all, realize that you shouldn’t carry big wads of cash with you to pay for things on your trip.  There are several ways to accomplish this with minimal cash…

Credit cards are the most handy forms of payment for the traveler. No cash involved, quick transaction, and a list of your spending is provided to you on your next bill.

We like to use a card that is accepted widely and offers us a rebate for using it. Others like to get points, like frequent flyer miles, when using their cards.  I try to put all travel expenses on the same card so I can get a running total, check for errors, and pay one bill for the entire trip.

Beware that you still need to stick to your budget. You don’t get that list of expenses until well after you’re home so keep track of what you’re spending…it’s very easy to ignore when you’re using plastic.  Also be aware of how credit cards work in other countries. Restaurants in France, for example, don’t have the separate tip line that you see in the U.S. on the credit slip. You need to leave your gratuity in cash.

Other countries, in Europe in another example, use credit cards that have RFID chips in them and many places and ATMs won’t accept cards without them…at this time, most American credit cards do have them embedded. Look for the gold chip on the front of the card. Check with your card issuer before you go to see if you will have a problem.

Also check with your card issuer before you leave to let them know you’ll be traveling.  Many credit card companies will suspend a credit card that is used far from home automatically to prevent fraud. You can clear that up with a call but that call may be hard and expensive to make in a foreign country. Much easier and cheaper to do it before you leave...a toll-free number to call is usually listed on the back of the card.

If you don’t have a credit card or prefer a cash-like “pay as you go” system, use your bank’s ATM card with a Visa or MasterCard logo to make purchases on your trip. This works just like a credit card but you need to be aware that the money is instantly deducted from your account. Keep scrupulous track of debit card use to make sure you do not overdraw your account and incur a fee.

For both credit and debit cards, most come with extra foreign transaction fees on every purchase made outside of your home country. Again, check with your issuer before you go. There are some cards that come without these fees.  Here’s a list of some cards without them, http://www.cardhub.com/credit-cards/foreign-transaction-fee/ , and another one here: http://www.nerdwallet.com/blog/top-credit-cards/no-foreign-transaction-fee-credit-card/ .

One difference between credit cards and debit cards in general is that credit cards offer better protection against fraud and also come with perks like damage insurance for your rental car.

As much as we’d like to go cashless, it is not quite possible to do completely. You’re going to need some. Like we mentioned in our Travel Tip about tipping, we like to go to the bank first and get a hundred (or two) dollar’s worth of ones and fives for tips.

On vacation, travelers used to count on traveler’s checks. Don’t bother with these relics anymore…it is very hard to find merchants now who take them and you’re going to have to find a bank teller to cash them now.  In a pinch, you can also usually cash a check at your hotel’s front desk.

Instead, use your ATM card. You usually get the best exchange rates and can get your cash quickly and conveniently. Know that you’ll get dinged with fees so don’t use an ATM for a small sum. Get a hundred dollars or more to make it financially feasible.

Also, make sure you do it discreetly and safely.  Use a money belt and your hotel’s safe for large sums.

Finally, don’t go into hock for your vacation…only spend what you can afford. Also, only go where you can afford to go…don’t get to the point where you have to take out a loan to pay for it…and have fun!

-Darryl
Copyright 2012 – Darryl Musick
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