Getting ready for an international trip is exciting, but preparing your wallet is just as important as packing your bags. If you use the wrong card when you are far from home, you can easily waste hundreds of dollars on sneaky fees and terrible exchange rates. We want to make sure you keep that money for your trip instead of giving it to your bank.
The golden rule: Avoid foreign transaction fees
Many cards charge you a fee every single time you swipe outside your home country. This is usually around three percent of whatever you just bought. It might not sound like much when you buy a coffee, but it adds up fast on hotel bills and dinners. Before you leave, check if your card has a foreign transaction fee. If it does, leave it at home.
If you are looking for a new card for your trip, you do not have to pay a high premium to get this benefit. Many no annual fee cards offer zero foreign transaction fees. You can also find cash-back cards that skip this fee, meaning you earn money back on your vacation purchases without losing a cut to transaction costs.
Say no to dynamic currency conversion
When you pay for dinner or check out of a hotel abroad, the card terminal might ask if you want to be billed in US dollars or the local currency. This is a trap called dynamic currency conversion. It sounds convenient to see the price in dollars, but the merchant is choosing the exchange rate for you. That rate is almost always terrible.
Always choose the local currency. Let your card issuer handle the conversion. They will give you the official network rate, which is much fairer. It is a simple choice that saves you money on every single transaction.
Watch your interest rates and balances
Travel can get expensive, and it is tempting to worry about the bill later. However, carrying a balance on your card is a quick way to erase any travel perks you earned. Credit cards charge an annual percentage rate, or APR, which is the total yearly interest rate you pay on any money you borrow and do not pay back by the due date. These rates can be very high.
If you already have some debt before you travel, you might want to look into balance transfer cards to move that high-interest debt to a lower rate while you plan your trip. The goal is to pay off your travel card in full every month so that your APR does not matter.
Keep your travel fund earning money
While you are saving up for your big trip, your money should be working for you. Keep your vacation fund in a high-yield account under your banking & savings strategy. You want to look for a high annual percentage yield, or APY, which is the actual rate of return you earn on your savings over a year, taking into account how interest compounds. A good APY keeps your travel fund growing while you plan your itinerary.
When you are actually on your trip, try to avoid using your debit card for daily purchases. Credit cards offer much better fraud protection. If a thief steals your debit card info, they can empty your actual bank account. If they steal your credit card info, you can report it and your cash remains safe.
Prep your cards for the journey
Before you board the plane, take a few minutes to prepare your cards. Some banks still require you to set a travel notice so their fraud department does not block your card when they see a sudden charge in another country. You can usually do this in a few clicks on your bank's app.
If you are traveling for work, look into business cards that offer travel protections and do not charge foreign fees. If you are still working on your credit score, you might look at cards for building credit that offer low fees and secure limits, helping you build a positive history while you see the world.
Protect your trip
Sometimes things go wrong. Flights get delayed, bags go missing, or you might need medical help. Some credit cards come with built-in travel insurance that covers these headaches if you paid for the trip with that card. Read the fine print before you buy extra coverage, as your card might already have you covered. Knowing what your card protects can save you from buying double coverage you do not need.