We are from India and we do regularly visit our friends and family there. I have a bank account in India where I remit money to before going there. This money usually covers all expenses in incur during our India trips. But it may require us to travel to another company for work. We may even plan a Europe trip in coming years. One of the questions that I’d need answer on is how to pay for expenses overseas?
When going abroad, whether for business or pleasure, one thing you need to consider is exchanging currency and how you are going to carry your money whilst overseas. This is not a decision that should be taken lightly. You could end up getting a lot less for your cash if you do not assess your options. After all, let’s say you leave exchanging your money until you get to the airport.
You will definitely suffer at the hands of a poor exchange rate. The exchange store in question knows it is your last resort and you can’t exactly go anywhere else, so they can get away with charging more.
Keeping that in mind, in this post we are going to take a look at all of the different options you have at your disposal when it comes to travel money
(Related – The best travel advice, Walk)
First and foremost, let’s begin with the option of carrying cash around with you. Of course, with this option there is always the risk of the money being stolen or lost. You have no form of protection if that occurs.
Nevertheless, a lot of people like carrying cash with them, as they feel it is more convenient and of course it is accepted everywhere. The best method is usually to carry some cash and then go for one of the other options mentioned in this post.
When it comes to exchanging your currency you have a whole host of options at your disposal. As mentioned in the introduction, you don’t want to leave it until the last minute.
You should monitor the exchange rates to determine when it is going to be the best time to buy the currency you need. You can easily do this online and buying off the Internet comes recommended as well, especially as a lot of companies will deliver the money directly to your front door.
This is especially beneficial for those that do not have a nearby branch. Some online companies will allow you to set an alert and thus, they will inform you when the exchange rate hits a rate you’ve already pre-selected.
Traveller’s checks have long been a popular form of carrying money, as they are one of the safest options. You can easily replace your traveller’s cheques if they have been lost or stolen. Of course, this is something you cannot do with cash.
Traveller’s checks are also widely accepted at banks and other places throughout the world. However, it’s highly unlikely that you will be able to pay with them, as most businesses will not accept this as a form of payment. Instead you will need to cash them in.
The convenience of traveller’s checks is another plus point, especially as they can be ordered online nowadays. However, you do need to be mindful regarding where you purchase your traveller’s checks.
This is because you are likely to be subject to higher exchange rates and other fees as well, with commissions and cashing in fees being quite common. Make sure you assess the full picture to be sure that you are getting the best deal.
Prepaid cards are a popular option. The way these cards work is simple – you upload funds onto the card and then you can spend the money in stores or you can withdraw cash from ATMs.
You will essentially use it in the same manner as you would use your credit card, with the distinct difference being that you upload funds prior to spending with a prepaid card. This allows for much better money management, meaning you can’t get into any debt. You can also take advantage of good exchange rates by uploading cash at a time when the rate is favorable.
Other advantages of using a prepaid travel card include the fact that they are widely accepted and you won’t suffer any foreign-exchange fees, as you will with a debit or credit card. You are also protected from card fraud and identity theft.
This is because your card is PIN protected and not linked to your bank account. If you lose your card or it is stolen, your money will be safe and you can replace the card. Most prepaid card providers will have a 24/7 emergency line for instances like this.
Apart from this, it is also worth taking into account the fact that a lot of prepaid cards give you the chance to upload multiple currencies, meaning you can use the card again and again.
This is undoubtedly the most convenient option of them all. You don’t need to exchange any currency, you don’t need to order traveller’s checks or upload funds to a prepaid card. All you need to do is make sure you take your credit card with you.
It’s as simple as that! Moreover, if you have one of the major credit cards you should have no trouble using it abroad, no matter where you are.
Nonetheless, credit cards are certainly not without their disadvantages. One of the main cons is the fact that you will be charged for every transaction you make. Moreover, if you opt to pay in your home currency you will suffer at the hands of high exchange rates and there may be even more charges on top of this!
Therefore, if you use your credit card overseas you will definitely end up spending a lot more money than necessary.
On the other hand, there are few credit cards that do not charge foreign transaction fee. Here’s one such list for your use. These days all frequent travelers have a no-foreign-fee credit card.
Personally, I’d prefer this type of credit card for my travels. I don’t have to carry cash or checks and their will not be a fee to worry about.
Hopefully, you now have a better understanding of the different options that are at your disposal when it comes to travel money. Of course, there is no right or wrong answer when selecting the appropriate option.
It all depends on what is going to work for you. Some options are more secure than others; some are more convenient, some present better value for money. As stated earlier, it is probably a good idea to consider taking advantage of two of the options instead of merely one. A lot of people like to carry a certain amount of cash and then use a prepaid card as well for example.
Another aspect is the place you’re going to. A detailed research on internet is required on the availability of check encasing centers, ATM location and type of ATMs, etc. There’s not many merchant establishments in African or Asian rural areas that accept a credit card. Depending on where you’re going to you may need to carry cash and in a large amount.
And when you’re carrying a large amount of cash, check the destination country’s regulation. We can’t carry more than $10,000 in to USA from outside, else you’ll have to report in customs form.
When you decide to exchange currency, make sure you research and get the best possible rate. Exchanging money at airport is probably the costliest of methods available.
On the other hand there are places where they accept US Dollars in addition to their local currency. In that case you don’t have to exchange to local currency, thus saving money.