What should you do with your money when you travel abroad? This is probably one of the most complicated questions for any trip. Through trial and error (and many mistakes), I’ve managed to figure out some tips and tricks for how to deal with your finances when you travel internationally. Of course, different destinations will all have their own quirks, but the basics can go a long way. Here are 20 tips for handling your money when you go abroad!
1. Get a good travel credit card
The best way to deal with money abroad is to not pay for your trip! Ha, I joke (kind of)—but getting a credit card that can allow you to accrue points or miles and exchange them for flights, hotels, etc. is one of the best ways you can travel. Look for a credit card that offers a large bonus and waives the annual fee for the first year. I’m currently loving my Chase Sapphire credit card, and you can read a full review of it here. It offers 50,000 bonus points (worth $625 of travel) if you spend $4000 in the first 3 months. It also isn’t tied to a specific airline or hotel chain, so it offers flexibility in booking travel.
2. Get a card with no foreign transaction fees
Whether it’s a credit or debit card, find a way to use your card abroad at no additional cost to you. The Chase Sapphire credit card does not charge foreign transaction fees (another reason it’s one of the best out there!), so you can swipe away. Foreign transaction fees are killer. I lost a lot of money on fees during my first semester abroad, and that money could have meant another weekend trip. But you live and learn—so make sure you’re not being charged when you use a card!
3. Cards are great but cash is king
While credit cards and debit cards are always a good option for handling money abroad, at the end of the day cash is king. You might not always be able to pay with card, especially if you’re opting for small towns over big cities—but cash will always be accepted. Make sure you keep some cash on you, even if it’s just a small amount.
4. Always pay in the official/local currency
Your best exchange rate will always be in the local currency. Even if they accept different currencies or have a card machine that allows for purchases in another currency, never ever do it! The exchange rates will be horrible, and your bank will always give you the best exchange rate (even if they add a foreign transaction fee on top of it).
5. Make sure your banks/credit cards know you’re traveling abroad
Just so that you don’t end up running around Moscow at midnight by yourself… call your bank(s) and credit card companies and tell them you’ll be traveling abroad, and where you’ll be. Otherwise your card might be blocked, and you’ll be stuck.
6. Remember: different countries will have varying different exchange rates
This is especially true in Europe, where you can hop borders really easily: different countries will have different exchange rates. While Sweden, Norway, Denmark, and Iceland all use some variety of the kroner (krone or krona), exchange rates will still be different in every single country, as they are all different currencies. Some countries on the Euro may be substantially cheaper than others (the cost of Montenegro versus France or Italy will be much cheaper). There is a big difference between a trip to the UK using pounds (GBP) and a trip to Poland using the złoty (PLN).
7. Check exchange rates before you go
That being said: check the exchange rates for the countries you’ll be visiting before you go. I always get a print-out for conversion to US Dollars on OANDA before I go, and then keep it in my wallet.
8. Don’t get big bills out
If possible, avoid withdrawing large amounts of cash that will come out of the ATM in big bills. This is especially true anywhere in Eastern Europe—you’ll have a really hard time breaking big notes, as no one will accept them. Try to avoid getting money you can’t spend by being smart with your bills—withdraw 90€ (1-50€ note and 2-20€ notes) instead of 100€ (2-50€ notes), and be strategic about breaking the large bills whenever you make a large purchase.
9. Use free ATMs
The only thing worse than being abroad and getting charged for foreign transaction fees? Getting an ATM fee added on top of that. Try to find and use only free ATMs when you’re abroad—in general, bank ATMs are a good place to start. Avoid using small ATMs inside restaurants or shops, since they will generally charge a fee. In the UK, none of the ATMs at the supermarket chains (like Sainsbury and Tesco) charge fees. Skip the fees since those $2 charges can really add up!
10. Keep leftover cash for your next trip
Ever since my first trip abroad, I’ve always tried to leave a country with a little bit of cash left over. Having just a small amount of money will be great for when you head back to that country—or will be great for saving money at airports you have a layover in—and can make your arrival just a little less stressful.
11. Never ever exchange money at the airport!
Currency exchanges at the airport will rip you off precisely because they can. Never ever EVER exchange money at the airport! To get enough cash to get you into the center/to your accommodation (where exchanging money will be cheaper), I usually recommend withdrawing a small amount of cash from the airport ATM. It should be enough to get you to your accommodation and last you through your first day. Then find an ATM in the center and get cash for your visit from there!
12. It never hurts to have Euros
If you’re traveling in Europe, chances are you’ll be hitting up at least one country that uses the Euro. And even though Euros aren’t the official currency across the continent, they are still the best currency to have as they are widely accepted in many European countries! Although it might not be cheapest to pay in Euros in shops or restaurants, it is a very common currency that will give you probably the best (and cheapest) exchange rate at currency exchanges. After Euros, pounds sterling (£GBP) will probably be your next best bet.
13. Know what the coins are
It’s incredibly easy to rip tourists off by giving back incorrect change. Learn what coins you’re using, and be able to recognize them. In Central/Eastern Europe, it is also basically required that you pay in as close to exact change as possible, and you will very likely either be asked for exact change or yelled at for exact change. Knowing your coins will make your life a whole lot easier.
14. Tipping culture might be different
Coming from North America and the United States, I’ve really struggled to adjust to the tipping culture abroad. In the U.S., tipping (particularly at restaurants or bars) is basically mandatory, as employees can be paid a very low base wage and some survive on tips alone. This is not the case in many places, especially in Europe. In general, outside of North America the policy is to tip (or simply round up your bill) if your service is good and you’re a satisfied customer. Always try to find out information from a local (simply asking at your accommodation) about tipping practices where you’re visiting. While tips are always appreciated, they are not the necessity they frequently are in the U.S.
15. Don’t forget about tax
In the U.S., tax isn’t included in the price tag on most things you see: you get your items, go up to the counter, and you pay a bit more money than what’s displayed on the price tags. Not all countries do this—in Europe, most countries include tax on the price tag. Don’t be shocked if it’s a bit more than you’d expect! When you go to buy a crate of beer, it’s really only that £15 you saw on display. No added state, federal, or liquor tax. This also works conversely—if you’re visiting the U.S., make sure you have enough money to cover the tax on your items!
16. Always separate your money
This should be Traveler’s 101: always separate your money. Spread your cards out throughout your bags, hide cash in different places, and always make sure that your money isn’t all in one place. That way, if your luggage gets lost or your wallet gets stolen, you won’t be totally stranded without any money. I recommend keeping some cash on you, along with maybe one card that you can use. The rest should be divided: a credit card hidden in your backpack, an envelope of cash hidden in a suitcase, a debit card in your day bag. The saying is true: you should never put all your eggs in one basket, just like you should never put all your money in one place!
17. You might have to pay more as a foreigner
Tourists and foreigners are typically charged more than locals. While this might be the official policy (like I found on my visit to Zambia), it is usually based on the discretion of the person in charge. Taxis notoriously rip off tourists (always agree on a price before you get in!), and vendors will usually up their prices when selling to foreigners. Sometimes it’s just the way things are.
18. Learn a few phrases of the local language
If you can, I always advise learning a couple key words in the local language. “Hello,” “goodbye,” “thank you,” and “please,” are a good place to start. Even though foreigners might pay more (see above), making an effort to communicate with locals in their own language can go a long way—and maybe even save you a couple cents!
19. Be wary of people exchanging money in the street
One of the oldest scams in the books: someone comes up to you with a big bill (20 or 50 or 100 or whatever) and asks if you have change to break it. Their bill is a fake, you’re a foreigner and you don’t know any better, so you think you’re helping them out but actually you’re getting scammed (and unknowingly committing a crime). Never exchange money with people on the street. If you need to exchange money, go to a store or restaurant, or to a currency exchange. Less than a minute after I withdrew cash from an ATM in Prague, someone came up and asked if I could make change for them. Luckily I knew not to do this!
20. Open a local bank account if you’re staying long-term
If you’ll be in one country for 6+ months, I usually recommend opening up a bank account. This might be tricky (as some banks will need proof of residence), but in general it’s a great way to save money on annoying foreign transaction fees. I found it much cheaper to open up a bank account in England, and transfer money from my U.S. bank account to my UK bank account via Paypal. I then had my own UK debit card, which obviously didn’t cost any money in fees to use in England! If you’re staying somewhere long-term, consider opening a bank account.
What are your tips and tricks for handling money abroad? Let me know in the comments!