While it is possible to see the world on a shoestring budget, there are several ways that an otherwise perfect overseas holiday can be derailed by money problems, from losing access to your funds, to being charged more than you expected to access your accounts.
Here are a few simple tips that are worth keeping in mind when planning your next international adventure:
Tell the bank where you’re going
Unless you’re a freewheeling nomad who constantly drifts from one continent to the next, overseas travel requires a bit of planning in advance. One small but important step when organising your overseas travel is to let your bank know the dates you’ll be overseas, and which countries you’ll be visiting.
Usually all it takes is a short and simple phone call – a bit of a hassle to be sure, but one that can make a big difference between being able to make full use of you debit and credit cards, and finding yourself locked out of your own accounts, having to make tricky international phone calls to put things back in order.
And if your find yourself making spontaneous changes to your travel itinerary – say, popping across a border for the weekend – it may be worth contacting your bank to let them know, just in case.
Watch out for fees
Using your cards to access your money overseas often involves paying a variety of fees for the privilege. For example, when getting money out from an overseas ATM, you may be charged:
- A fee from the local ATM provider
- An ATM withdrawal fee from your own bank
- A currency conversion fee from your bank
- An international transaction fee from your bank
This is all in addition to possible finding yourself worse off due to international exchange rates, depending on what country you’re visiting.
If you expect to be using a lot of cash while overseas, consider using a card with minimal overseas fees and charges, and make your ATM visits strategically, to avoid being charged too many of these fees.
For example, rather than making multiple trips to the ATM and withdrawing small amounts of money as you need it, you could withdraw a large amount of money in one ATM transaction, then split this total up between your travelling companions and/or divide it up between your wallet, pockets, bags and hotel room so there’s always some cash available in case of emergency.
Use local currency
Sometimes when shopping overseas, the shopkeeper will offer to let you pay for your purchases in Australian dollars, rather than the local currency. While this may be a nice concession on their part, and allow you to get a clear idea of exactly how much you’re spending without having to do a bunch of mental calculations, it could end up ultimately costing you more.
This is because the exchange rate used by the retailer may be more expensive than the rate used by your bank and/or credit card provider. Additionally, even though your bank may not be charging you for currency conversion when you pay in Australian dollars while overseas, you may still be charged fees for making international transactions anyway.
Consider the risks of cash versus cards
Every transaction you make, both at home and overseas, carries some degree of risk, where you could lose your money, your financial details, or even your identity. Different payment methods come with different risks, and it’s worth being aware of all of them.
Paying with cash may seem relatively risk-free in a digital age, as only currency is exchanged cash transactions, with little information changing hands.
However, this can come back to bite some travellers, as not only can cash be physically lost or stolen, but cash transactions can be much harder to trace if you find yourself being ripped off – once you lose your cash, you may never get your money back.
Credit cards have different risks, such as card skimming and other scams, which could potentially see thousands of dollars in fraudulent transactions being run up in your name.
That said, most credit card companies use a range of security and encryption measures to protect your transactions, and can provide replacement cards or access to funds if your cards are lost or stolen. Plus, the digital record of your credit card transactions can be helpful when resolving any disputes.
And if the worst happens and you are a victim of fraud, many card providers offer fraud guarantees, where if you diligently report fraudulent transactions in a timely manner, they can be investigated and reimbursed with relatively little fuss.
One possible third option is the pre-paid travel money card, which can be used similarly to a credit card, but limits you to only spending money you’ve pre-loaded in advance, instead of providing access to credit. While these cards may not offer quite as much flexibility as some other card options, if your travel money card is lost or stolen, only your pre-paid funds should be at risk, rather than your entire credit limit.
Check if you’re already insured
Did you know that with right credit card, you may not need to organise travel insurance for your trip? Some credit cards (particularly Gold and Platinum-tier cards) offer complimentary access to travel insurance, provided you book your flight and accommodation using the credit card.
Before making any assumptions, it’s important to contact your credit card provider and check exactly what’s required to receive this complimentary travel insurance, and also to confirm what is and isn’t covered, in case there are any areas where you’d like to get some additional insurance. Also, it’s worth checking what excess you’d need to pay for making a claim, and confirm whether any other fees or charges are involved.
Also, keep in mind that some of these cards offer access to other features that could come in handy while travelling overseas, such as 24-hour access to a concierge service that can help you in booking tickets and planning future adventures.