Created on: August 18, 2010
When you are traveling abroad then you will need to have access to money in the local currency and it is always wise to arrive with some rather than being caught out without any local cash. It makes good sense to order some foreign currency in advance of your travels as you should get a better exchange rate than if you wait until arriving at the airport which will invariably charge you more.
If you have firm plans to travel in the future and usually spend quite a bit it is well worth purchasing or pre ordering local currency from a foreign exchange company to be sure of locking in the currency conversion at a good rate. Anyone planning a trip to Europe next year for instance could lock in a really good exchange rate now, rather than be at the mercy of currency fluctuations.
Vacationers will often find that their plastic isn’t the flexible friend they thought it was and credit cards are not the best option for travel. It is always recommended if you do take your plastic on your travels to notify the bank first as they often suspend a card which suddenly experiences unusual usage. However even those who have informed their bank have still had their cards stopped leaving them with expensive phone calls from abroad to have the problem rectified.
Cash withdrawals on credit cards are the most expensive way of obtaining cash abroad as you pay twice, for the withdrawal itself and for the currency exchange. In addition you are charged interest from the moment of withdrawal. Debit cards fare no better as they also charge for currency exchange and cash withdrawals abroad.
Travellers from the UK can benefit from a small number of credit cards which do not charge foreign commission fees but always check first for up to date information in case of policy changes. Currently the Saga credit card levies no foreign commission charges and the Nationwide levies none in Europe and charges 1% elsewhere.
Prepaid credit and debit cards provide the best option, and some are now being sold as travel cards. Look for one which will allow you to load it with the currency of your destination. They have the drawback of the initial fee to purchase them, but you aren’t charged interest as you use your own money and the withdrawal fees are generally less. You can insure some cards for a small fee so that if they are lost or stolen the balance of cash left on the card will be replaced. They present the most convenient option for accessing your cash whilst traveling.
Never make the assumption that credit cards are universally accepted when traveling abroad as many vacation destinations are more used to cash transactions, which means you need to be certain of accessing your cash whilst abroad.
Learn more about this author, Katerina Nikolas.
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