Nine Tips for Spending Money Overseas

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I'm not Mr. Adventure, but I do travel abroad more often than the average American. I've been doing it long enough to remember when American Express traveler's cheques were almost your only option for obtaining currency abroad. Today, of course, you can use your credit and ATM cards as freely as you can in the US – at least in developed countries (I'm not a "third world tourist"). But things are changing still, and recently I've been caught off guard. Follow these travel tips, my fellow Yankees, and you will avoid some unhappy surprises.

  1. Alert your bank and credit card companies before you go. This happened to me in New Orleans, of all places, in 2003: on my first day in town, I whipped out a credit card that I hadn't used in a month, and spent it on a nice dinner. The next day my bank – or, rather, my credit union, traditionally more cautious than a bank – froze the card, much to my embarrassment. I didn't have my password, so I couldn't get them to unfreeze it. Today, I don't think American banks even bother with "vacation alerts" if you're traveling in the US, but if you're leaving the country, call ahead and tell them your travel dates and the countries you'll be using your card(s) in.
  2. Hit the airport ATM as soon as you arrive at your destination. You may be in a hurry to rush off to your hotel, but I can't stress this enough: Don't wait until you're settled before seeking out the local currency. Get some cash ASAP. Yes, airports have currency exchange services, which is fine if you have a fat wad of American dollars on you (their fees are slightly higher than banks in town), but ATMs adhere to actual exchange rates, so you get a much better deal. Note: foreign ATMs vary wildly; some conveniently give you smaller bills, and some only spit out, say, 50-Euro notes (about $70), which are hard to break. So make sure you get change at the airport too – including lots of coins (e.g., 1- and 2-Euro pieces). You'll need it sooner than you think. Those currency exchange desks should make change for you.
  3. If you feel safe, withdraw only large sums from ATMs. Few American banks don't ding you when using foreign ATMs. But here's the thing: You pay the same $5 fee whether you withdraw the equivalent of $50 or $300, so you might as well take out the $300 all at once instead of getting $50 per day over six days (and thus paying that $5 six times). Of course, it's unwise to keep too much money on you; stow some of it in your suitcase at your hotel and take it out as you need it.
  4. Treat your wallet like your gas tank: Never wait until it's empty before you refill it. In other words, always have enough cash on you to cover your next planned expense – lunch, dinner, train tickets, whatever. Unless it's a dirt cheap country, you should at least carry the equivalent of $40 on you at all times. You never know when a restaurant or museum is going to be "cash only" or when you need a taxi – and you don't want to spend an hour looking for an ATM. (They're often never around when you need one.)
  5. Bring all your credit/ATM cards. This has already happened to me several times in the last year, in Spain, Italy, and even in the UK: I'll pay for lunch with a credit card that worked the night before, and their reader rejects it. (Unlike American restaurants, where the waiter scans your card at the cash register, most foreign eateries now use wireless credit card readers that the waiter brings to your table.) And my card will still be fine; I'll use it again later that day with no problem. Some readers are just funky. This is one reason why you should always have enough cash on you to cover the bill. But bring your other card(s) just in case.
  6. Make sure your credit cards have PIN numbers. Yes, "PIN number" is redundant, since "PIN" means "Personal Identification Number". But anyway, as you know, in the US you just slip your credit card into a reader and that's that. Sometimes you sign, sometimes you enter your ZIP code. But you never have to enter a PIN. Not so in Europe! Especially with ticket machines at train stations. I learned this the hard way. Set up PIN numbers for all your credit cards. (Note: They snail mail you the PIN, so do this at least 2 weeks before your trip.)
  7. Get a credit card with a "Smart Chip", if possible. Credit card chip technology – for added security – is still a new thing in the US, and not all companies are on board with it yet. I have two major credit cards. One recently got the chip, the other remains chipless. This doesn't matter at home, but a lot of foreign countries have already adopted the chip – and some card readers are starting to demand it. Until the Smart Chip becomes universal (which should happen within the next 2-3 years), be warned.
  8. Get a credit card that doesn't charge foreign transaction fees, if possible. They exist! Ironically, the card I have that doesn't have the chip is also the card that doesn't charge me the 3% foreign transaction fee, so as you might guess, I prefer to use this card while abroad, and also when purchasing something on a foreign website (such as buying tickets in advance).
  9. Hit a foreign ATM only while the bank is still open. This sounds weird, but hear me out: I've had an ATM card for over 25 years and never once did an ATM eat it. Until last month. In Granada, Spain. On a Sunday night. Fortunately, my wife and I were in town for a few days, so I went back to the bank on Monday morning and an employee retrieved my card. But what if we were on our way out of town that night, and home was still several days away? Obviously this event is a rarity, but from now on I will try not to get cash when the bank is closed. This also means avoiding stand-alone ATMs that aren't attached to an actual bank. Good luck finding these at airports, though!