Keeping your finances in order while traveling might seem complicated, but in reality it is pretty easy if you're well prepared. In fact, it is not that much different than your typical banking when you're at home.
Still, there are a few more things you should consider doing before starting your trip to make sure you'll be able to access your money from anywhere in the world. And not only that, but also avoid paying too much money in international transaction fees, withdrawal fees, or currency exchange fees.
Have more than one credit card and bank account
When you're traveling, you won't necessarily have access to your local bank. In case something happened on the road like losing your ATM or credit card, getting your card blocked, or something else, it is always good to have separate bank/credit card accounts as a backup.
Usually, I keep most of my money in one account and a small amount for emergencies in the other. It is also important to link both accounts so you can transfer money from one account to the other should you need to. Having said that, it is imperative that you can access your accounts and fully manage them online.
For credit cards, it is also preferred to have them from two different providers Visa, MasterCard, American Express, and so on to guarantee access to money from any location.
Get a duplicate credit and debit card
The previous tip was about having two different bank accounts, but this one is about having a duplicate card from the same account. It's just another safety measure in case any of the previously mentioned scenarios happen to you. I've had the experience of having an ATM "eat" my debit card, and while I was able to recover it, it took some time for the bank to return it to me. In the meantime, I had my duplicate card to manage my daily spending.
For safety, I keep my duplicate cards hidden in a separate bag.
Notify your bank
Before you start your trip, you should notify your bank about your travel plans. Call and let them know when and where will you be traveling, so they don't block your account thinking that your international purchases are suspicious activity. Many banks will place just a temporary travel notice on your account. It is possible that you might need to renew it if you plan to travel long term.
Also, confirm with your bank about the possibility of having a new credit/debit card shipped to you at your new destination should you lose it on the road.
Get a travel-friendly debit card
This is one of the most important things you should do before leaving, as it will save you hundreds of dollars on the road just in withdrawal and transaction fees alone. When you withdraw money abroad, you will get charged an ATM fee as well as your bank's fee for withdrawing outside of their network. But, if you have a travel-friendly card, you might not get charged or at least get charged a lower amount.
I recommend checking the Global ATM Alliance to see if your bank includes a charge to withdraw money from any of the banks on the list. I also recommend opening a bank account that allows you to withdraw money from any bank around the world without any outside network fees.
Certain banks have international branches all around the world. If you have a debit card from one of these banks, you won't pay a fee to withdraw money from their ATMs around the world.
Should you not be able to get a travel-friendly debit card, only withdraw money abroad when necessary and the largest amount allowable by your bank or the local ATM. Why? Your bank will charge you a fixed amount of dollars for the transaction plus a percentage of the amount withdrawn, in addition to the fixed amount charged by the ATM's bank. Usually, these can add up to $10+ per withdrawal. So, you minimize that loss by withdrawing the largest amount possible, allowing you to make fewer withdrawals during your trip.
Get a credit card with zero international transaction fees
When making purchases in a foreign country, many credit cards charge a small percentage of the purchase for the international transaction. This is unnecessary since you can easily get a credit card that charges 0% on international transactions so that you will only pay the cost of the item purchased (converted into your currency).
Always hunt for the best exchange rate
I usually don't recommend exchanging money at exchange kiosks, unless it is necessary, especially if you have a no-fee debit card (like the one explained above).
Should you have cash that you'd like to exchange, try to carry only the most "liquid" currencies in the market, which are the US Dollar, the British Pound, and the Euro. If you exchange from these currencies to the local currency, you'll get a better exchange rate since they have a good "flow" and demand.
Lastly, always stay on top of the current exchange rate. I use the XE.com app to keep track of the current exchange rate of any currency. If I have to exchange money, I can compare the kiosk's rate to the real rate and see how much money I'm "losing" on the transaction.
Banking on the road is all about being prepared and conscious of how to manage your money.
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