When my husband Paul and I were getting ready for our honeymoon to Austria last year, one detail I almost missed all together was how we are going to actually spend money in Austria.
I was busy with the wedding planning and envisioned my honeymoon melted away my stress into the rolling hills and mountains of the backdrop to the acclaimed movie “The Sound of Music”.
Growing up, I dreamed of my wedding day like any other little girl, and in that wedding day there was whiteness, sunny skies, guests with smiling faces, and of course my prince charming waiting at the end of the aisle for me. But as with anything to do with love and happiness, there are costs and small details to handle, such as securing time off from work, setting up automatic finances so that our bills are paid while we were gone, finding a cat and house sitter, and booking/paying for the honeymoon.
And the big detail I almost overlooked – spending money in a foreign country: credit cards, debit cards, travelers cheques, cash? After calling around to my credit cards and banks, as well as researching options over the internet, I was surprised at just how much it costs to spend money abroad. Here is what I found:
Credit Cards/Debit Cards
There is a fee that may be assessed for use with credit cards that is either called a foreign transaction fee or the currency conversion fee, and sometimes an exchange rate fee. Also, banks who offer debit cards with the Visa/MasterCard logos are charged a transaction fee from Visa/MasterCard, and this charge may be passed onto you as the customer on top of the bank’s own charge. If you use an atm machine abroad, you will be charged your bank’s atm fee, as well as that country’s bank’s atm fee.
However, there are a few no foreign transaction fee credit cards that you can use to avoid foreign transaction fees.
Please note that if you will be using your credit cards/debit cards, you should call the number on the back and put a notification on your account for the dates that you will be out of the country to avoid any fraudulent activity transaction cancellations.
Travelers Cheques still exist with all of their pros and cons. These cheques are traditionally accepted almost everywhere, and can be used as currency or cashed in the local currency at banks, currency exchanges, and American Express Travel Service locations abroad. Also, if you write down the serial number of the checks and keep this in a secure location, should someone steal them from you or you lose them, then they are replaced free of charge. Typically there is not a fee to use or cash in your Travelers Cheques abroad. Some of the cons include if you use them for currency, some places like hotels and restaurants are known to give you a terrible exchange rate. Also, some remote locations will not accept them.
The two main issuers of Travelers Cheques are American Express and Visa. You can purchase these before your trip at Triple AAA (free cheques for members, but not every location provides this service), participating banks/credit unions (typically charge a percentage fee of value, such as $1.00 per $100), travel agents, foreign exchange bureaus, and at any American Express Travel Service location.
Travelers Money Cards
These are essentially gift cards that you can load and reload with money and use anywhere credit cards are accepted. However, the fees can be rather expensive. Here is a summary of the fees that applied when we traveled. The fees frequently change, so be sure to confirm the applicable fees just before you purchase them.
- Visa TravelMoney Card: This card was good for 3 years and cost $4.95 to purchase (replacement card fee was $5.95); there was an inactivity charge of $1.25 per month after 12 months; Load and Reloading fees were $10 for $100-$500, $20 for $501-$1000, and $30 for $1001-$1500
- Travelex Cash Passport: Travelex prepaid currency cards (Cash Passport) had an atm domestic fee of $3.00 and a foreign atm fee of $2.00, a loading/reloading commission that varied by agent, and a monthly fee of $2.50 (assessed after 30 days)
After assessing all of these options, Paul and I planned to check out the Travelex Cash Passport card to see if it could meet our needs in Austria. We also planned to be sure to purchase this card only one to two weeks before our trip in order to avoid the monthly $2.50 charge. Our back-up source was our credit cards/debit cards, which I called and put notifications on the accounts.
What forms of payment have you used abroad? What do you find is the best in terms of convenience and low fees?
If I’m going somewhere where I know ATMs are not a problem, I’ll typically just bring my bank card with me and use it to withdraw cash in the airport. If ATMs are harder to come by or I’m not sure, I usually get some cash from the bank before I go (in my experience, they offer the best exchange rates). For example, a couple months ago I was going to spend a couple of days in Korea on the way back from a trip to the Philippines, so I estimated my expenses and ordered around $300 worth of won from Chase.
I realize not everyone wants to carry around cash, but you really can’t beat it in terms of cost and convenience. Of course, if you’re worried about theft then change up accordingly.
That’s great to know that there are some credit/debit cards without foreign currency fees! That could be very useful. Another thing I do is to search online for any partner banks my bank has in other countries. At these banks, withdrawing money at the ATM doesn’t carry the same transaction fee normally charged.