It’s time for another practical post, in which we talk through the do’s and don’t’s of managing your money on the road, including especially credit cards. This is part of a series about the nuts-and-bolts of meandering minimally. If you’re not ready yet, we offered alternatives. Part 1 asked if you like travel. Part 2 encouraged you to think through obligations. Then Part 3 talked about potential travel companions, and Part 4 talked about health and health insurance options. Part 5 discussed having less stuff, theoretically and practically. Parts 6 and 7 encouraged you to make your lifestyle portable, in terms of fun and routines. In Part 8 we discussed language anxiety. Then we shared our philosophy of financial planning for travel. Then we offered tips about starting to budget your long-term travel expenses and about generating income on the road.
Credit Cards
We are big fans of credit cards, BUT ONLY if you are good at keeping a budget: minimalism includes not carrying the burden of heavy credit card balances either! We also like the fact that it keeps track of spending (in a way that cash does not). Here’s our advice:
- Choose a credit card that gives you something back. These days we like cash, but there are cards linked to airline or hotel points, or both. Capital One has no international fees and gives us cash back, so at the moment it’s our top choice.
- We have two different kinds of credit cards, just in case one doesn’t work at a particular location. But we mostly only use our American Express for purchases in the US. (Lots of foreign merchants don’t like or don’t accept American Express.) This, combined with a bank card, means we are never caught short.
- You might think about calling your credit card companies and banks in advance to let them know what countries you’ll be visiting. They can sometimes make a note in your file, which could save you having to contact them later.
- Most places in the world take cards with a chip and pin. If you haven’t got one, it’s worth asking your credit card company and bank to upgrade (nearly always free).
- It’s a good idea to keep a record of all account numbers, in case your cards are stolen.
Bank Cards
We tend to use a credit card because of the aforementioned cash back. But we always carry a bank card too, as a backup.
- We look for a bank with low international withdrawal fees. They don’t always advertise these, so ask. International banks tend to have lower ones. (Read about our HSBC accounts, one in the US and one in the UK.)
- Find out what your daily and weekly withdrawal amounts are – it’s usually $200-300 USD per day, so if you are trying to withdraw more, it will be declined.
- You may not be able to check bank account balances while you’re in another country, or to determine which account is which. It’s smart to remember your account number if you have more than one, so you aren’t taking money out of the wrong account.
- Make sure to set up online banking. Nearly every major bank has this available, and it allows you to move money around with a secure internet connection. If you can move money between an ATM-accessible account and one that is not, you’ve just decreased your risk if a card is stolen.
- Also, have your bank’s toll-free number handy, just in case. We’ve had bank accounts frozen because the bank suspected our cash withdrawal attempts.
- Speaking of PIN numbers, 4 digits is the norm most places in the world. So if you have a five- or six-digit pin, switch it. You can often do this at an ATM of your home bank or – failing that – at a branch in your home country.
- Not all ATMs are created equally: those actually attached to a bank – ideally, your bank, are best. Especially if you can use them during the hours when the bank is open, in case anything goes wrong.
Cash
Sometimes, however, you need cash on hand. Some countries (fewer and fewer) are still cash-based, as are some experiences. But be aware that a number of businesses of all kinds no longer accept cash. Here are our top tips:
- Carry cash in different locations: wallet (kept snugly tucked away, where it’s hard to get at), a couple of pockets, a few different places in your luggage.
- We also recommend clothes with zippered pockets as a way to deter pickpockets and the like. (This helps with budgeting too – if you don’t carry more than you want to spend, you can’t spend it!)
- Think about the places you’re going: if you are likely to need cash right away, try to obtain some in the local currency before you arrive. Many international airports have ATMs, but we’ve been caught short more than once. Once our card didn’t work in the ATM, and another time there wasn’t one.
- It is a BAD IDEA to use a credit card for a cash advance. But if you are stuck, be sure to pay off the full balance on the credit card, plus the withdrawal, before using it to get cash; most companies charge interest from the day you receive a cash advance.
- If your bank charges you withdrawal fees, you can sometimes find a place that gives cash back with purchases. In our experience, this is most frequently large chain grocery stores: we used to do our weekly shopping in the UK and stock up on cash.
Bonus Tips
- If you are anxious, and/or don’t have good credit, consider a prepaid traveller’s card. This looks like a credit card, but it works differently. You load an amount onto it, and you can only spend that amount. It’s not linked to a bank account, so it’s low-risk. Read the fine print, though: you may be paying a lot for that convenience!
- Traveller’s cheques: actually, we haven’t seen these in a couple of decades. If you like the security of them, consider a prepaid traveller’s card.
- Electronic payment agencies are very handy; many of them, however, only work in your home currency. Wise allows international money transfers from a bank account or a credit card (the latter at a slightly higher cost). We’ve been using them for a couple of years, and so far we’re pleased.
- When you are using a foreign card, many establishments will ask you if you want to pay in the local currency, or your own. Pay in local currency; that way you take advantage of the current exchange rate, rather than a fixed one. (But see above for foreign transaction fees.)
- If you’re travelling long-term, keep an eye on expiration/expiry dates for your cards.
There you have it: our best tips for credit cards, bank cards, and cash: using your money abroad! Do let us know if you have any additional tips, or stories of money mishaps on the road.
