Money, Credit Cards and International Travel

Financial Considerations for Traveling Internationally

You’ve got your passport and your bags are packed, but are you ready financially to travel abroad?

We’ve been to some pretty interesting places over the years but usually haven’t had issues with getting local currency or being able to use credit cards.

While some time back our favorite credit card was Discover. It offered a generous point system and claimed no transaction fees when used internationally. It took a number of trips over a couple of years to actually give up on trying to travel with our Discover cards. While they claimed that the card would be accepted anywhere the Diners Club emblem was displayed we found that to rarely be the case. So we arranged for Visa and MC cards with no transaction fees and haven’t experienced any difficulties since.

Getting ready for a recent trip proved to be a bit of a new challenge. We were off to the Falkland Islands, Argentina, Uruguay, and points South and immediately hit problems with Argentina. In attempting to reserve a hotel the first few wouldn’t accept the Visa card. It seems that credit cards are not widely used there. We then went to our bank to exchange for Argentine Pesos and were told they weren’t available. Checked with AAA – same thing. In the case of Argentina a collapse in their currency a few years ago stopped much of the financial world from actually doing business in the Argentine peso.

Next we reserved a guide and 4×4 in the Falklands but were told that we couldn’t use credit cards. No ATMs in the islands and they also use their own version of Pound Sterling. After several emails back and forth we settled with being able to pay with cash in British Pounds or US Dollars (no Euro’s).

Because Argentina has had a currency crises over the past few years money can be a problem. Our trip South began at the Buenos Aries International Airport and we had been told to avoid the exchange counters there. We have now started using a debit card (which we rarely do) for some travel, attaching it to an account with a specific balance and no overdraft. We used the debit card to access some limited cash at the airport ATM. We needed cash to get into the city. After that we have mapped several locations for Citi operated ATM’s in Buenos Aries with no service fees.

We will also be traveling out to Iguaçu Falls for a couple of days and while the hotel will accept Visa cards most everywhere else will require cash. This need for cash and not being sure where we can use credit cards can make things more complicated but it’s important to know about these requirements before you travel.

Here are a few tips on money and international travel

1. Let the bank know where and when you will be traveling.

Many banks will freeze your accounts if unexpected foreign purchases show up. It’s important that the bank or credit card issuer is aware of your travel plans so they can ensure the cards remains active with proper safeguards. On one extended trip to Barbados American Express froze our business cards and it took several days and numerous calls to straighten things out.

2. Determine if your PIN number will work where you’re going.

Before your trip, call your bank and credit card issuers and ask if your PIN will work at your destination ATM’s. Four-digit PINs work in most countries. If your PIN contains zeroes, however, that may be a problem in some non-network ATMs. Additionally, many foreign ATMs don’t recognize four-digit PINs. Calling ahead gives you time to change your PIN, if necessary.

3. Watch out for international transaction and currency conversion fees.

Since fees and conversion rates vary widely, it’s important to know exactly what you will be paying to make ATM withdrawals or paying with your debit or credit card. A new process that has become common is for merchants to ask if you want to charge in your home currency or local money? Avoid the temptation to ask for charges in your home currency. If you do you will discover that the bill included high transaction fees and a less than fair exchange rate with usually the merchant getting a commission. If you plan to travel with a credit card get one that doesn’t charge transaction fees and let your home bank calculate the exchange rate.

Contact your bank before you travel internationally to avoid any financial surprises

4. Ask about daily withdrawal limits on ATMs

Banks may have different withdrawal limits than ATMs. Keep in mind that any individual ATM may have a different withdrawal limit and limits may be expressed in the local currency. Have a backup plan that involves more than a single way to pay.

5. Verify your account balance.

Be sure there’s enough money in your accounts to pay for travel expenses once you get there; you don’t want to find yourself overdrawn on your trip. To alleviate any additional overdraft fees, on top of running out of money, you can transfer funds from one account to the other using a mobile banking app (stay off wifi with your phone)

6. Carry telephone numbers.

Get all the information you will need to contact your financial institution while traveling in case of stolen or lost cards. Most banks and credit card issuers will have local of international toll free numbers you can call to report any mishaps that may occur while traveling internationally.

7. When booking your hotel or rental car, use your credit card not a debit card.

It is best to use a credit card for reserving a hotel or rental car because hotels and rental car companies may place a hold on your card for a certain dollar amount for incidentals. If placed on a debit card these funds could be tied up for some time.

Use a credit card to pay for your hotel or rental car in case they place a hold on your card for incidentals

8. When getting cash in local currency, use your debit card.

Your debit card is ideal for getting cash in local currency because you may get the same interbank exchange rate as you do with credit card purchases – this is generally the cheapest way to get local currency. Getting cash with your debit card allows you to avoid the cash advance fees that your credit card would charge. It’s also convenient as there are ATMs available in many international airports. Most major bank ATMs don’t charge a usage fee, but watch out for ATMs that are not affiliated with any banks – they may charge high fees.

9. Set up auto notifications on your credit cards.

We also set up options to be notified by text message for all transactions where the card is not presented in person. This has helped on a couple of occasions. Once while in Spain someone went on a bicycle buying spree (11 bikes) in Rome with our card. Nice to be able to contact your bank when something like this happens.

10. Talk to your bank about ATM networks and credit card fees.

Take the time to talk to your bank and find out about the ATM networks that you should use when traveling internationally, it makes a big difference. Most networks have maps that show the locations of their affiliated ATMs and ATM machines almost always identify the their affiliated network. If it doesn’t – don’t use it. Sadly most bank service representatives  are poorly trained to discuss these issues but don’t stop if you are not getting the information you need.

Bon Voyage!

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