Spending Money Abroad

The other month I received a new type of credit card from MasterCard. And it quickly became my new best friend. Why you may ask? Well it is a smart card that incorporates the same type of chip and PIN (Personal Identification Number) technology that has been in use throughout the U.K. and most of Europe since 2004.

And it just so happened that I was about to make my annual trip back to England. What a relief! I no longer had to worry about trying to get cashiers to understand that they can still manually process my credit card…I wouldn’t have to seek out a nowhere-to-be-found pen to sign paper receipts…and I would no longer have to insist that my credit card be accepted.

British Airways Signature Visa Card with "Chip and Pin" Technology | Fly.com

British Airways Signature Visa Card with "Chip and Pin" Technology (Courtesy: British Airways)

In short, using my new smart card in England was bliss. But, given that I have yet to receive chip-enabled cards from Visa or American Express, I can only assume that most U.S. retailers are still some way from adopting this type of technology at their point of sale systems.

So, with this in mind, I thought I would share some tips on how to make spending money abroad a whole lot easier. And, like the cheap fares we show on Fly.com, they will also save you some money too!

Before you leave

  1. Let your bank know that you are about to travel abroad before getting on the plane. There is nothing worse than having your card declined by a cashier because your bank doesn’t realize that you are on vacation and thinks there has been a security breach.
  2. Do research ahead of time to find out about foreign transaction fees. Some of your credit cards and bank cards will charge less or more than others. Recently my husband signed up for the Marriott Visa Signature card because it has no transaction fees for international purchases – as compared to his other credit card which charged 3%.
  3. Know which credit cards offer you a better money-to-point ratio for your reward programs. They are a great way to save money on future purchases and can even help you fund your next trip. For instance a colleague of mine was telling me about his Chase Sapphire card, which offers 3-4x points on specific online travel agents like Travelocity and Expedia. Booking your flights through your credit card’s online portal (like Ultimate Rewards Mall from Chase) will help you accumulate a ton of additional points, which you can redeem for travel or cash back. Check out this comprehensive list of the best travel credit card deals from ThePointsGuy.com.
  4. Find out the approximate exchange rate for the country you will be visiting before you start shopping! This way there will be no surprises on your credit card statements when you get back home.

At Your Destination

  1. Try and avoid locations that are unattended. This includes automated ticketing machines like the ones you see in subway and railroad stations. Instead seek out manned kiosks.
  2. If you don’t have a chip and PIN card, make sure you have sufficient cash on you to pay for essentials should you run into any credit card acceptance issues (like the unattended kiosks mentioned above).
  3. If a cashier asks you if you want to be billed in U.S. dollars, always say “no” – otherwise you risk higher currency conversion charges and fees from the retailer (otherwise known as Dynamic Currency Conversion). The retailer’s conversion will likely include an exchange rate with a 2.5% mark up (over a wholesale exchange rate) as well as a 2.5% commission. So if you get home and discover a bill that shows a DCC that you did not agree to, ask your bank to contest the charge.
  4. Be safe with your money. Don’t carry around a ton of cash and don’t carry around all of your credit cards. Instead take advantage of hotel safes to limit what you have on you. This way, should your wallet get lost or stolen, you always have a back up. Be even more cautious when traveling to cities on the PickPocketMap.com Top 10 list.
  5. Keep the 24-hour international customer service number for your bank somewhere in your hotel room. This way, if your card is lost or stolen, you can quickly call them up to cancel it. International numbers are located on the back of your credit card and are also available on your bank’s website.

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