Managing Expenses Abroad The Savvy Traveler’s Guide

In today's world, traveling with minimal cash and relying on electronic payment methods is increasingly convenient. Most destinations accept cards widely, and hiccups are rare, especially in advanced countries. However, it's essential to be prepared for the occasional issue. For instance, I once had trouble paying a hotel in Bhutan because the card reader couldn't connect to the server in India. Thankfully, I was aware of potential issues and settled the bill the night before, with the help of a Bhutanese friend who provided a bridge loan. Here are some tips to ensure smooth transactions during your travels.

Travel with Two or More Cards

Having backup plans for your cards is crucial. Cards can be stolen or face unauthorized charges more frequently when you're on the move. This happened to me in Thailand, where my card had fraudulent charges. While I was reimbursed without issue, I couldn't get a new card due to my constant travel between destinations. Fortunately, I had two other cards and a debit card to rely on. Always carry multiple cards to avoid being stranded without a payment method. Just don’t put them in the back pocket like in the stock photo below.

Avoid Cards with Exchange Fees

Ensure your cards do not charge exchange fees. Many cards now cater to international travelers and offer no exchange fees, saving you money on every transaction. For instance, the Capital One Rewards Card in the US has no annual fee and doesn't charge for currency exchange. Most premium cards like the American Express Platinum, also in the US, which have annual fees, do not charge for currency exchange. Opt for cards with this feature to save substantially on unnecessary charges.

Always Charge in the Local Currency

When given the option, always choose to be charged in the local currency rather than in your home currency. This applies to both establishments and ATMs. While it might seem convenient to see charges in dollars, the exchange rate used is often disadvantageous, sometimes by as much as 10%. Always opt for local currency charges to avoid unfavorable exchange rates. For example, when asked if you want to be charged in dollars or euros, always choose euros.

Outside the US, Use Portable Card Readers

Outside the US, the use of portable card readers is ubiquitous. These devices act as a barrier between you and potential fraudsters. It only takes someone to get your card and security code for it to end up for sale on the dark web. Surprisingly, such essential tools are not as prevalent in the US. Always ask for a portable card reader or go to the cashier and pay in person. Don't be shy or ashamed. If someone asks for your card, politely say that you prefer to pay with the mobile reader or at the counter. While the risk may be low, the hassle of dealing with a canceled card while traveling is not worth it.

Two-Step Authentication for Mobile Transactions

Two-step authentication is widely used for mobile transactions. If you plan to pay using your mobile for tickets on the go, you will most likely need access to your mobile for the verification code. Take this into account if you decide to save money using a local SIM for calls or data. The local SIM will have a different number than your own, preventing you from receiving the verification codes.

If you find that changing SIM cards on the go is inconvenient, consider traveling with a secondary phone for the local SIM or using an eSIM. This way, you can keep your primary number active for authentication while enjoying local rates for calls and data. This setup ensures you can verify transactions smoothly and maintain security during your travels.

Notify Your Bank Before Traveling

Always inform your bank and credit card companies about your travel plans. This helps prevent your card from being flagged for suspicious activity and potentially getting blocked while you're abroad, particularly if you do not travel often. Most banks allow you to set travel notifications online or via their mobile apps.

Credit Card Acceptance

I love my Amex, and many of my travels are paid for thanks to the Amex Platinum miles program. However, outside the US, Amex acceptance can be hit or miss, especially outside brand hotels or luxury shops, particularly in Asia. To avoid inconvenience, carry at least two cards in addition to your Amex. The IHG Traveler Mastercard from Chase is a great option, as it offers wide acceptance, travel-friendly features, IHG miles and IHG status. This ensures you have reliable payment options wherever you go.

Use ATMs Wisely

When you need cash, use ATMs connected to banks rather than standalone machines in tourist areas. Bank ATMs are generally more secure and offer lower transaction fees. Also, withdraw larger amounts to minimize fees, but not so much that you risk carrying too much cash.

Set Up Email Alerts for Transactions

Consider setting up email alerts for transactions over a certain amount. Many banks and credit card companies offer this feature, allowing you to receive instant notifications for any purchases exceeding a specified threshold. This can help you quickly detect any unauthorized or fraudulent activity and keep better track of your spending while traveling. By staying informed in real-time, you can promptly address any issues and maintain control over your finances.