I still remember my high school spring break trip to the Bahamas when traveler’s checks were still en vogue. Nowadays, the prevalence of credit cards with no foreign transaction fees and options to withdrawal travel cash at ATMs with little or no service fee makes spending money overseas feel fairly similar to back home. A number of strategies and best practices are still necessary to avoid spending more money than necessary and keep travel cash and credit cards safe—as is knowing the best banks and credit card companies for managing money.
Preferred Banks for International Travel
My trusted HSBC ATM card tied to a savings account has been my go-to source for withdrawing money in international locales. Unlike most banks in the United States, HSBC appears in an impressive number of countries across much of the world—80 to date—with zero hassle in terms of withdrawing money. Their standard savings account also refunds withdrawal fees for non-HSBC banks and the card cannot be used as a debit card—only to withdrawal travel cash from an ATM, thus making theft a near non-issue. I transfer money from my regular checking account back home as needed via their website or mobile app and keep a slush fund for international travel.
Bank of America
Bank of America debit cards traditionally carry a foreign transaction fee for day-to-day purchases, but are still a solid option for simply withdrawing money if the need to take out more travel cash isn’t a daily occurrence. The added convenience of using one’s everyday checking account for withdrawals overseas is surely a big perk for a lot of travelers, even if others—like myself—prefer a travel-only account. While Bank of America doesn’t refund withdrawal fees from other banks, they do have partnerships with a handful of international banks, so travelers in a handful of other countries can save money on those pesky fees.
Best Credit Cards for International Travel
Capital One doesn’t charge foreign transaction fees and is one of the easier credit cards to acquire for those with minimal credit, which fits the financial profile of many wanderlusts. The company is a bit behind on implementing chip technology, but does plan to offer it to all customers by the end of 2015. Other credit cards might offer more rewards or better customer service, yet I think Capital One cards are a great starting point when looking at choices for international purchases.
Does My Card Need Chip (EMV) Technology?Chip technology provides an added level of security and is widely used in Europe. Most establishments, however, use credit card machines with options for both chip technology and traditional magnetic strips. It’s convenient and very much a part of the future for credit cards, but I’ve never run into an instance where the chip is absolutely necessary to make purchases. In the rare cases where stores only accept cards with chips, they can make a quick call to the credit card company and sort out the payment.
High-End or Niche Credit Cards
All of the following cards do not have international transaction fees and offer more rewards, perks, or a combination of both than basic credit cards, but do typically require a better credit score.
2x points on travel and 40k bonus points after first 3 months spending of $4,000 or more
1.5x miles on all purchases and double miles for first year
25,000 bonus points after $2,000 in purchases during first three months, plus 3x points for flights and $100 airline credit fee credit.
40,000 bonus points after $3,000 spending in first 3 months, as well as 2x miles on all purchases
Other Tips for Managing Finances
Safely Store Travel Cash and Credit Cards
- Anything can happen anywhere, but for safer locales—and really this applies to the United States, too—keep any wallet or loose travel cash in a front pocket. Back pockets are just begging for trouble.
- A general rule of thumb anywhere with a known prevalence of pick pockets (or worse) is to keep a bit of spare travel cash in a front pocket to hand to any would-be mugger and keep any credit cards, significant money, passports, etc. in a secure money belt. I don’t like the larger money belts that are obvious when someone lifts up their shirt, nor do I think the ones people hang around their neck do anything but scream “I have money under my shirt!”.
- Opt for a more discrete money belt that blends in with a belt fairly well. The most enterprising and aggressive criminals will find any money belt, but pickpockets are left without an option and even those directly requesting money or valuables seldom do a thorough pat-down—trust me, I know from first-hand experience.
- Regardless of the strategy implemented for carrying money in transit, I think leaving at least one credit card and/or travel cash in the hotel room safe or a similar secure location is a great bet. By splitting things up, there’s always something to come back to if the worse case scenario happens.
Where to Exchange Money
Never, ever exchange money in an airport unless losing travel cash isn’t a big deal. Swapping that wrinkled $20 bill for a cab fare is one thing, but anything bigger is just a great method to throw away money. Most travel experts advise only taking money out of ATMs—advice I wholeheartedly agree with if the transaction fees are either waived or recouped. On the off chance travel cash needs to be exchanged into another currency, consider finding a reputable spot in town, which almost always offers better rates than airport locales.
Also make sure to avoid shady street lurkers claiming the best rates in town. While it’s true come countries with financial issues (e.g. Argentina) enable people with US dollars to make out like bandits by exchanging USD on the streets for travel cash, the amount of fake currency should squash any temptations unless a trusted local can be used as an intermediary.
Considering Every Angle
Some might consider me paranoid, but I’ve been thankful for using the following protocol on numerous occasions that were not life threatening or even considered a crisis by any stretch of the imagination. It’s simply a good idea to have other ways to make purchases when traveling internationally.
Few people need to carry every credit card they own with them overseas—even people traveling for months or years at a time. Maybe the foreign transaction fees are high one a certain card or the limit is too low. In any case, leave one card with a trusted family member or friend. I’ve used Skype a number of times to ask for my digits when weird things crop up. The last instance? I was trying to buy a soccer ticket and the UK-based e-commerce site wouldn’t authorize either of the credit cards I had on my person. One call later and my Barclays card collecting dust back home came through mere minutes before the game sold out.
Have a business credit card or another card probably not applicable to the trip? Write down a credit card number in a notebook after adding one—or another increment—to the digits. Memorize the three-digit code and expiration date. Making one-off purchases is now feasible without having to carry around an additional card. I’ve used this to pay the occasional business-related bill I can’t convert to auto-pay and other cases where I really need a card for one or two online purchases, but simply can’t justify keeping track of another physical card on my journey.
Header image containing travel cash by Flickr user Garry Knight.