5 minutes reading time
JULY 20 2021

How to Pay Abroad

When it comes to international travel, you want to be well prepared in order to enjoy the sites, the cuisine, and the local culture stress-free. So of course, one of the main concerns for many travelers is finding the best way to pay for things in a foreign country. There is nothing worse after a long day of travel than being unsure how to pay when you finally arrive. With so many payment methods available these days, and an overabundance of scammers, it can all be a bit overwhelming. And let’s face it, traveling can sometimes be stressful enough - so let’s talk about the best ways to securely spend money abroad hassle-free so you can fully enjoy that time away from home.

Get Cash After You Arrive

You never know when you will need a little cash, so it is always a good idea to carry some local currency while you are traveling, just in case. Your local bank or a currency exchange bureau in the airport may seem like the best option to get your foreign currency. But be aware, these institutions tend to charge currency conversion fees and offer unfavorable exchange rates. For the best exchange rate, we recommend making ATM withdrawals once you arrive at your destination. You will likely pay ATM fees to the bank that issues your debit card and to the machine owner, so try to make as few cash withdrawals as possible. It’s a good idea to carry only the amount of cash that you need, so stash some in a safe place where you are staying or spread it out in different compartments in your luggage.

Prepaid Cards

Prepaid cards are an ideal option when traveling internationally because they are easy to get (no credit score requirements) and accepted almost everywhere. You simply preload them with a set amount of money so that you can avoid returning home to a huge credit card bill. Prepaid cards are also more secure because they are not linked to your checking account. So no need to worry about losing any personal info if they get lost or stolen while abroad. Another bonus: if you can preload the card with the local currency before you leave home, you can often avoid exchange fees.

When buying a prepaid card, be sure to read the fine print, as some may charge foreign transactions fees or fees for cash withdrawals. American travelers can find good prepaid cards from Visa or Mastercard, while travelers to the United States from Europe and other countries have many more options available.

Credit Cards

If you choose to use a credit card while traveling abroad, don’t get caught off guard by the foreign transaction fees. Most credit card companies charge foreign transaction fees of around 2-3%, as well as cash withdrawal fees. These can start to add up over the course of a trip. The best credit cards for international travel do not charge foreign transaction fees so check with your current card issuer to find out what fees they charge.

When you plan your next trip, let your credit card company know your itinerary ahead of time so they don’t freeze your card when they see transactions taking place on foreign soil. You can usually do this online or by calling the phone number on the back of the card. If possible, bring two credit cards just in case one does get cut off or compromised. As a general rule, Visa and Mastercard are more widely accepted than American Express and Discover.

Contactless Payment

Contactless payment options like Google Pay and Apple Pay are quick, convenient and becoming more widely accepted around the world. Neither Google nor Apple charge foreign transaction fees, but you will be charged any fees associated with the credit card that is linked to your account.

Skip the Traveler’s Checks

Traveler’s checks may have been the way to go a few decades ago, but not anymore. These days, it is difficult to find anyone who will accept them. You will most likely have to find a bank, where they will likely charge you a fee for exchanging them and offer an unfavorable exchange rate. Bottom line: traveler’s checks aren’t worth the hassle.

What is Dynamic Currency Conversion?

Dynamic currency conversion is sometimes offered when using a credit card abroad. This means that the transaction would take place in U.S. dollars instead of the local currency. It sounds convenient, but it will cost you more money. The exchange rate offered for dynamic currency conversion is usually much worse than the rate used by the card issuer, so always say no when it’s offered.

Finally, it is important to understand that credit card systems vary from country to country. For example, Chip and PIN cards that require you to enter a code to verify your identity are much more common outside of the United States. Additionally, the U.S. has been slower to adopt contactless capabilities for credit cards than many other countries.

Plan Ahead and Pay Easily While Traveling

The best way to manage your personal finances while traveling abroad is to have a plan and understand the fees associated with using your prepaid, credit, or debit cards. So take your trip into consideration and choose the payment method that best suits your travel plans. With a little preparation, you can feel confident in knowing that your money will be safe and well-spent on your next trip abroad.