Planning for a holiday abroad? You must be excited! Aside from having the proper documents and checking travel advisories (read Travelling outside MB or Canada? How to ensure a safe and worry-free trip to check if you missed anything), sorting out money matters is a crucial step not to be missed if you want to have a worry-free vacation.
Here are some steps to take before you leave:
Plan or budget your expenses
Not to be a wet blanket but this is important. It’s so easy to overspend when you’re out there and having fun. Start by setting a reasonable spending limit. You don’t really need to have an itemized list but it’s good to have an estimate in mind. This way, the only thing you will be thinking about after your vacation are happy memories, not mounting debt. Take my word for it, you’ll thank me later (you’re welcome!).
Know the types of credit cards accepted in your destination
Most people use credit cards when travelling because it’s more convenient and safer to carry (than let’s say, cash or traveller’s checks), plus, it may have built-in protections and perks. Most countries accept Visa or Mastercard but there are exceptions. It would also be helpful to know if there are other card requirements like, for example, only chip-and-PIN cards can be used or if they recognize only certain banks. Research these details by checking online, asking your travel agent, friends you know who have gone to the destination, or the personnel at the hotel where you’ll be staying.
Inform your bank that you are travelling
For some banks, this is automatic and you don’t need to give notice. But to be certain, give your bank a visit or call to tell them where you’re going and for how long. This ensures that your card won’t be flagged for fraud and your transactions won’t be blocked. This is also a great opportunity to ask about your credit card’s features. Verify rewards, built-in insurance and other perks. Also, ask about fees charged on foreign transactions and any other charges so you can maximize your card use.
Have more than one card
If in case your card gets declined (and this is almost sure to happen), have a back-up card that you can use. Consider getting a card that is different from the one you already have (for example, if you have a Visa, get a Mastercard, Discover, or any other type that is accepted in your destination). Also, look for cards that offer rewards for travel spending and those that have no foreign transaction fees.
Always bring enough cash for smaller expenses and for transacting with vendors who don’t accept cards. It will also be your savior in case you lose your cards or if they don’t work. It may be a good idea to exchange currency before you leave rather than using money changers at airports. Exchange rates may be bad at certain locations compared to banks.
Take note of additional fees
If you will be using ATMs abroad, be aware of additional fees for withdrawing money or even verifying your account balance. It may be a good strategy to withdraw a bigger amount to limit the times you use ATMs. Also, even if you are using your credit card and not cash, you may still lose money if your bank uses a conversion rate that is considerably lower than the market rate. Keep these in mind to keep your spending in check. Stay up-to-date about currency conversion rates or better yet, ask your bank what rate they use.
Install essential apps on your smartphone before leaving. These may include your bank’s mobile app, an exchange rate calculator and a language translator to help you manage your money better. It can come in handy when you’re trying to haggle with a local vendor.
Always pay the local currency
If you are given a choice between paying in Canadian dollars or the local currency, choose the local currency. You will be at the mercy of merchants when you choose dollars because they will always use the lowest exchange rate (banks use more client-friendly rates). Also, your bank will still charge a fee even if it’s in CAD because it is a foreign transaction (typically 3% of the amount) so you really don’t save anyway.
Other money-saving tips:
- Put your memberships on hold – If you’re going away for a month or longer, put your gym membership or Netflix subscription (and similar services) on hold to save some dollars.
- Pay your monthly bills – Take care of your bills before you leave to ensure that you won’t be bogged down by late payment charges.
- Be aware of roaming and data charges – Using your phone abroad can cost a lot! Use roaming only when it is absolutely necessary. Look into other options such as using a local SIM card or wi-fi and online apps to send messages. Don’t forget to put your phone on airplane mode and make sure that your cellular data is off. Certain phone settings turn cellular data automatically on when it can’t detect wi-fi so check your settings.
- Keep your cards and cash secure – Whether you use a wallet, money belt, cash clip, or a deep pocket hidden in your underwear (lol!) make sure to keep your cards and cash secure. Keep your credit card and back up card in separate places. Don’t pack your money, cards or important documents in your checked bags. Always keep them with you in your carry on.
- Get insurance – You can never predict accidents. Paying a bit of money so that you won’t have to worry about the possibility of incurring medical bills, the cost of losing expensive gear, or suffering from trip cancellations is a wise move.
- Check your bank statement – Check your bank statement after you come home from your vacation and review the transactions thoroughly. Check for discrepancies like additional charges that you are not familiar with.
- Lastly, don’t buy things you don’t need! You don’t need things. Just make great memories!
Sources: 7 useful credit card tips for the travelling Canadian, Nadine, Saving Money in Winnipeg; 10 essential money tips for anyone travelling abroad, Jill Krasny, Business Insider; and What is a foreign transaction fee? Kim Porter, Credit Karma. Accessed June 18, 2019.
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