It’s almost summer. If you’re lucky, you may have a trip abroad in the cards. Maybe you’re eager to experience different languages, food or nightlife. But, you’re probably not too excited at the thought of using a different currency. Accessing your funds abroad can certainly be a headache.
It’s likely that you’ll have limited access to your bank’s ATM machines and money, and incur extra costs and fees from your bank or credit card. You’ll find some tips to meet these challenges below.
Tip 1: Let Your Bank Know You’re Going Abroad
A number of transactions in remote or otherwise unfamiliar locations may prompt your bank or credit card company to freeze your card. To reduce this risk, tell your bank in advance of your overseas or cross-border trip. Many banks allow you to set forth your itinerary on its website, mobile application or by telephone.
This creates a record that can help you explain why you might not receive or respond to bank notices. To that end, if you’ll be gone for weeks, tell your bank’s mortgage department in case you might be gone when it sends statements or notices.
Tip 2: Get A Travel Credit Card With Low Or No Foreign Transaction Fees
Purchases abroad with a credit card often result in foreign transaction fees. This fee is incurred because the vendor prices the good or service in the foreign currency, but your credit card company calculates your balance and interest in U.S. dollars. These foreign transaction fees typically run around 3 percent of the cost of each transaction.
But, there are some credit cards that waive or reduce this fee. Bank of America Travel Rewards Credit Card, Capital One Venture Rewards Credit Card and Chase Sapphire Preferred Credit Card are all examples of cards with no foreign transaction fee.
Tip 3: Get An ATM Card With No Foreign ATM Fees
In the United States, ATM fees come from using a machine outside of your bank’s network. Additionally, the ATMs bank charges you a fee. The same thing can happen when you use your ATM card overseas. To top it off, you may have to pay extra for foreign transaction fees and fees to the ATM operator to convert currency.
To reduce your fees, consider a bank account that doesn’t charge you to use an ATM abroad. One such account is the Charles Schwab (NYSE: SCHW) high-yield investor checking account. Other choices include the Fidelity Cash Management Account with Fidelity Visa and a Capital One checking account. Many banks may reimburse you for fees assessed by the ATM operator.
Tip 4: Check To See If Your Current Bank Partners With A Bank Overseas To Avoid Fees
If you can’t find an ATM or branch of your bank near your destination, call your bank to see if they have an overseas partner. If you use a partner’s ATM, it’s as if you used your own bank’s ATM and you can avoid the fee.
For example, Bank of America has this relationship with Barclays Bank in the United Kingdom and Deutsche Bank ATMs in Germany and Spain.
Tip 5: Avoid Currency Exchanges At Airports And Hotels
The apparent convenience of airport and hotel currency exchanges can cost you.
Exchange outlets in these venues have you as a captive customer – and they take full advantage. This reduces the competitive pressures to offer you good rates or lower fees. Plus, hotels and airports charge hefty exchange booth rents. If you’re going to exchange currency, consider finding the best deals through your bank before you embark on the international travel.
If you plan a little in advance, you can certainly avoid the hassle and fees that come with using a new currency abroad. That way, you’ll be able to spend time and money on your vacation.
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