This article was last updated on December 30, 2015
The last thing that we would want to experience while traveling abroad is money crisis of some kind. Believe me, it’s not a good situation to be in when you are on your own in a culturally diverse land, and have no money. Well, not having any money is a bit of an exaggerative situation here; however, less money is certainly possible.
Banking overseas is a different ballgame altogether. It’s not very simple as it is in your hometown. On the other hand, it certainly helps to know these 3 things about money – exchange rates, banking fees and foreign transaction fees. Most of the banks will levy their own respective fees for all your overseas transactions.
For those of us who have been there know how ridiculously high these fees are. And, it’s no point wasting energy in fighting with the banks since they are not going to hear you anyway.
So wisdom lies in staying smart and know banking rules comprehensively. Knowledge of these boring details will help you avoid massive fees, and leave you with more money for food and accommodation.
These are the 5 most effective money saving tips meant for travelers who wish to save money on their national and worldwide banking transactions!
5 Money Saving Tips before doing Worldwide Transactions
1. Use an ATM Card
It is definitely much better to withdraw money from your own bank’s ATM card since that way you can withdraw money in local currencies. Using an ATM card is the easiest way of getting money when you are travelling either in your own country or elsewhere.
Of course, each cash withdrawal that you will make will be subjected to conversion fees and an overseas ATM fees. You must check with your bank about the fees that they will charge. Also another thing to know is that ATM’s usually offer the best exchange rate after credit cards, but it is much better an option than exchanging cash at a money exchange office.
With ATM cards, just make sure that you don’t use those ATM machines that are found in hotels, or local convenience stores. These places mostly charge hefty ATM fees and have the worst conversion rates. It is better to locate a bank and use its ATM.
2. Look for money transfer services
Money transfer is a fantastic option especially for solo travelers. Instant money transfer service is one such service that helps anyone to transfer money online to any bank account by simply using a bank account number along with a proper bank code.
All banks have their bank codes, and you need to be aware of their individual bank codes at the time of money transfers. Before leaving for travel, it is advisable to go to your bank and get a list of bank codes, or you can even go online for the same.
You will also need a few bank details such as postal address of the receiving bank, your account name and number. Most of the money transfer services are fast, reliable and offer excellent exchange rates. Just make sure that all your money transfers are done securely. Banks usually invent their own exchange rates to hide their fees, but money transfer services give you real exchange rates also known as mid-market rate. Even the duration of transferring money is short, usually 1 day. If it’s less money transfer then the transfer can take less than 1 day.
3. Using credit card
Firstly make sure that your company’s credit card is very well popular and accepted at most of the places. Some credit cards don’t get accepted by some foreign merchants. Secondly, pay attention to your cards foreign transaction fees that you will have to incur for every purchase that you will be making internationally. These fees are not charge for conversion of currencies, and therefore, even when you buy goods in US$, you will still be charged with those fees.
Also be on a lookout for a cash advance fee that can be charged if you use your credit card to receive cash from an ATM. Besides the cash advance fee, you will also be charged a usage fee for using an ATM of a bank that you do not have an account with.
A good part of using credit card overseas is that you will not have to worry about currency conversion rates, and you will invariably get one of the lowest conversion rates ever possible on your card. Also, you will not have to worry about losing money since you never will even if your card is stolen. All you need to do is report that your card is missing and you will inevitably be not responsible for any unauthorized purchases done on that card.
Smart thing to do is to use a debit card at ATMs and not a credit card.
4. Give a try at traveler’s checks
A traveler’s check has certainly lost its charm after the credit cards were introduced. However, coming to think of it, using a traveler’s check is a much better option as far as safety is concerned. It is very handy to keep traveler’s check with you in case you lose your credit card when traveling.
You mustn’t put all your money in traveler’s checks, but only few hundreds of dollars worth is enough. Moreover, do some findings on your destination so that you know if there are places who still accept traveler’s checks. These days, not many places accept these checks. So it is better to be sure before you depend on them blindly.
5.. Watch out for these final tips
It is imperative for you to get in touch with your bank before hopping to another country. Make sure to inform your bank manager about the countries and destinations that you are going to travel. This in particular is very important, as sometimes, credit and debit cards get suspended for suspicion of fraudulent activities.
Many travelers fall into the trap of dynamic currency conversions done by merchants of different countries. Merchants offer to convert the price of a purchase from local currency to US$. This practice is beneficial for those travelers who have little knowledge about exchange rates. But, some merchants may apply an unfavorable exchange rate in order to increase their profits. The best way to avoid such a situation is by checking on the internet the actual currency conversion rate and calculates the rate accordingly.
Traveling overseas can be quite overwhelming sometimes. It is, however, one of the best experiences that one can ask for in their entire lifetimes. All you have to be is a little smart in making your decisions, and, most importantly, have the right knowledge.
You have to be absolutely sure about carrying the right types of credit and debit cards that do not levy high foreign fees. Also know how to get the best exchange rate at the time of currency conversion. If you don’ take care of such things, you are likely to get a mini shock after you come home and see your bank account.
If you take banking lightly especially when traveling abroad, you are really going to be left in a sticky situation. A simple rule while traveling should be to pay less money to the banks and spend more on traveling. So bank smart!
Photo credit: Pictures of Money