A trip abroad that was planned carefully in advance with an eye towards stretching your travel dollars by identifying cheap travel options such as cheap airplane tickets and discount hotel rooms, or cheap vacation packages can end up costing far more than expected if you are not aware of the most cost effective ways of paying for things at your destination.
The following are suggestions as to the best ways to pay for things abroad:
Find a credit card issuer, such as Capital One, who charges no fees for international transactions on select credit cards. Note, most credit card companies charges currency conversion fees of 2 to 3 percent for such purchases. Transaction free credit cards should be used to pay more big purchases including hotel and restaurant bills.
Do not use such credit cards to take money out of an ATM where you will be charged large fees: up to $20 in transactions fees or 4 percent of the amount taken out, as well as any local ATM fees.
A cost effective way of withdrawing cash using a debit card is to use a bank such as Citi and Bank of America that have international branches or partners that allow debit card holders to use their ATM cards fee free in most cases. Most U.S. banks will add on debit fees that will range from 3 to 8 percent. You need to check directly with your bank to see if they have ATM branches where you will be visiting.
If you want cash on hand prior to leaving for your trip, consider exchanging cash at your bank. Find out about delivery fees in advance since they are often as much as $10.
Alternatively, travelers can purchase cash online. Online delivery fees are usually higher than at banks, though if you are exchanging a large amount of money ($1,000 or more) delivery fees are sometimes waived if requested in advance.
Travelers checks are a less attractive option since not all places will accept such checks and associated fees of up to $9 per check can significantly diminish their value. The one place where travelers checks remain an excellent value is China where fees are low.
Another less cost effective option is to purchase a prepaid foreign currency card. These cards can be used just like credit or ATM cards. Their downside is that they come with many fees, for withdrawals, inactivity, to close the card, and restrictions concerning withdrawal minimums and limits per day.
The worst place to exchange money is at foreign exchange desks at airports, city centers and hotels. Exchange fees can run as high as 20 percent. www.cheapfares.com