Money and Banking Options Abroad
Cash, Credit, and Banking Tips for International Travel
Planning your financial needs ahead of time is important, as unexpected issues can be daunting and stressful in a foreign economy. Can you get by with a debit or credit card? Or is it a cash-based economy? Make sure you research the local economy, costs, and options for cash, credit, and mobile payment apps. The following guidelines provide a useful base for your research.
Before You Leave
Check Exchange Rates
Exchange rates vary country-to-country and currency-to-currency. Websites likes oanda.com provide real-time currency converters to help you plan your budget and expenses.
Order or Exchange Currency
The most inexpensive way to exchange currency is usually with your bank, either online or at a bank branch location. AAA members can also order foreign currency online or in person at a local branch. While airport currency exchange kiosks may be convenient, they rarely offer favorable rates. Before you leave, order enough of your destination's currency to cover initial expenses like food and transportation upon arrival.
Notify Your Bank
Many banks freeze credit and debit cards if they suspect fraudulent activity. To prevent this, notify your bank and credit card companies of your travel dates and destinations before you leave.
Consider a Travel-Friendly Credit Card
Depending on the length of your trip and how frequently you travel abroad, you may want to sign up for a travel credit card. These cards typically don't charge foreign transaction fees. Also, using a credit card to make purchases abroad gives you a more favorable exchange rate than other payment options.
Have a Backup Plan
Make photocopies of the front and back of your cards, and store them in a safe place in case of loss or theft. Bring a backup credit or debit card so you can still access funds if your primary card is lost, canceled, or stolen. You could also store your bank's customer service number in your phone in case you need to call them.
Be Aware of Fees
When using a debit or credit card abroad, two types of transaction fees generally apply: an international ATM fee and a foreign transaction fee. The ATM fee (typically $2-5) is charged for the privilege of using an ATM that doesn't belong to your primary bank. The foreign transaction fee covers the currency conversion cost and is a percentage (typically 1-3 percent) of the total amount you withdraw or pay when making a purchase.
Wherever possible, use ATM's located inside of a bank branch or opt for machines in well-lit, well-traveled areas. Both in the U.S. and abroad, criminals are known to attach fake credit card readers to ATMs; unfortunately, they look similar to the real thing and capture your bank information. Be mindful of anything suspicious attached to the machine. If you're traveling in an area where theft and petty crime are common, limit your withdrawal amount and consider storing your cash in multiple places so you have a reserve if your wallet is stolen.
Try Cash and Credit Alternatives
Contactless payment options like Apple Pay and Samsung Pay are easy and convenient payment methods in certain geographies. The technology is prevalent in parts of Asia-Pacific, Europe, and South America, but you can't rely on it everywhere just yet. Also, contactless payment limits vary by country and retailer, and purchases above a certain amount may require a PIN.
Peer-to-peer payment applications like Google Wallet, Square Cash, Venmo, and Paypal make sending money quick and easy in the U.S. They also limit your need to carry cash. You only need Wi-Fi or a data network. Currently, Venmo and Square Cash can only be used to accept and make payments in the U.S., whereas Google Wallet can handle U.S. and U.K. currencies. Paypal, however, is available in more than 200 markets and supports several currencies. For region and country-specific options, Verse is popular across European markets; Paytm is one of the largest in India; AliPay and TenPay dominate China; FlickPay is prevalent in South Africa, and RecargaPay is big in Brazil.
Some underdeveloped nations lack the infrastructure for reliable, easy-to-access ATMs. If you're traveling to such a destination, research and plan how you'll acquire funds necessary for your travel. Potential options include:
- Transfer money electronically via Western Union or TransferWise
- Order or exchange cash prior to your trip (keeping in mind that carrying a lot of cash is not ideal)
- Use U.S. dollars, which are accepted in select countries and territories
- Mobile phone options abroad
- Useful apps for international travel
- U.S. State Department country-specific information
- ATM Locators: MasterCard and Visa