6 Steps for Managing Your Money While Overseas
From changing money to getting emergency cash, how to protect your funds in a foreign country
One day in Cape Town, South Africa, travel expert and author Bailey Richert was robbed at an ATM. “I was surrounded by several men who took my debit cards from me,” she says. “The next day, naturally, my accounts had been emptied.”
“I called my bank to explain what happened, but from their end, it looked like I had simply withdrawn all my money. As absurd an act as that would be, it took a lot of convincing for them to return my funds.”
Handling money works differently when you visit a foreign country. Before taking a trip outside the United States, put together a plan to keep your funds safe.
1. Notify your debit or credit card company
It's a good idea to carry a credit or debit card during your trip. While the U.S. Travel Insurance Association (UStiA) says your bank may charge you a small currency conversion fee when you make a purchase, the exchange rate is still likely to be better than the rate you’d get by using cash.
Before you go, advise your bank or credit card company of your travel plans. Otherwise, if you start using your card overseas, they might flag it as suspicious activity and freeze your account, the State Department warns. Be sure to give them a list of countries that are geographically near the one that you plan to visit. “You never know when you might have to make an unexpected detour to a neighboring country,” says Richert.
Learn your card company’s procedures for reporting and refunding a fraudulent purchase. Credit card companies are generally more willing than debit card companies — such as banks — to issue refunds, according to Richert.
2. Set up a financial support network
Share your travel plans with at least one trusted friend, family member or colleague in the United States. Give them the ability to deposit funds into your bank account and to speak with your banker on your behalf.
“It is essential to take someone into your confidence in the U.S. before you depart,” says Richert. “Work with this person in the U.S. to discuss your back-up plan for getting emergency money.”
3. Put some cash in your wallet
The amount of cash you should carry depends on your destination. If you’re traveling to rural areas where electricity and Internet access is relatively rare, you’ll need more cash as vendors probably won't take credit and debit cards. If you plan to rely largely on cards, the State Department recommends you find out in advance if they are likely to be accepted.
If you’re carrying a large amount of cash, don't let anyone see you with it, including merchants. “Keep most of your money in small bills and coins,” says Richert. “Also, people in rural areas might not have the change you need.”
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4. Avoid traveler's checks
Richert advises the modern traveler against using these traditional alternatives to carrying cash.
“Traveler's checks are becoming an artifact of the travel past,” she says. “The number of retailers that accept then is declining, and the number of places accepting credit cards is increasing.”
You may also receive a less advantageous rate, or even be charged an exorbitant fee, when changing them into cash or using them to make purchases, according to the UStiA.
5. Exchange currencies carefully
The cost of trading dollars for foreign currency is constantly changing and varies from place to place. To get the best rate, wait until after you arrive at your destination. Your best bet is to go to a crowded tourist location, where competition among money changers keeps rates favorable, the UStiA says.
While buying currency at your local bank in the United States may seem convenient, you won't receive as good an exchange rate. UStiA says the same goes for airports.
Carry a pocket calculator to estimate how much purchasing an item would cost in both dollars and a foreign currency, suggests UStiA. It will protect you from unscrupulous vendors, as well as help you to shop smartly. There are also numerous smartphone apps that can do this for you.
6. Take care of emergencies
You never know when your source of travel funds will dry up. You may have an emergency, your bank could freeze your account or someone might rob you. If you find yourself broke and need cash right away, follow these tips from the State Department.
- Ask your friend in the United States to deposit money directly into your bank account.
- Look for a nearby money transfer company — such as Western Union — and ask your friend to wire cash.
- Your friend can also wire cash to a foreign bank, but that process might take several days.
- PayPal offers a prepaid Mastercard debit card that you can sign up for before your trip. “You can have friends send money to your Paypal account directly for you to use,” says Richert.
If none of the above is possible, contact the nearest U.S. embassy or consulate, which may have resources to assist you. For instance, your friend can wire funds directly to the State Department, and you can collect at the embassy or consulate.
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