There is one area that, if not considered, could end up costing you A LOT of money when you travel: Credit and debit cards. You may not realize it, but when you travel you will use your cards a lot, and if you don’t do your research you may end up paying hefty charges and fees for each and every swipe… But I’m here to help you.
There are tons of travel blogs out there offering advice on saving money when you travel, but many neglect the very common and very easy to address problem associated with credit and debit cards. It’s a fact that most cards will charge you extra for international use. If you are on a short holiday, this may not amount to much, but if you plan on traveling for the long term, then you would be well off to do a little research.
Travel Debit Card:
I’ll start with these because these are the ones that I use most often. I prefer to pay with credit when I can (for the points), but I also spend most of my travel time in underdeveloped countries where…well, let’s just say it isn’t an option. So, for that reason, I end up hitting the ATM about once a week.
If you have ever tried to use your ATM card locally but at a different bank, you will note that there is often an extra handling charge for this. As you can imagine, the same applies for international banks, and the fees will often be around $5. Well, it doesn’t take long to realize that a $5 charge to take out $50-$100 is not exactly business savvy.
So unless your credit union happens to have a branch in Botswana, you’re pretty much S.O.L.
The first time I traveled, I had to deal with this, and I just ended up praying for a low withdrawal fee and taking out the maximum amount I could every time I hit an ATM. Walking around with a wad of cash in your pocket through Bangkok’s back alleys is not the safest I have ever felt. So what’s the alternative?
Well lucky for you, I am a much wiser traveler than I was back then, and I have done my homework. I found the Holy Grail of debit cards for travel, and am here to share it with you. Charles Schwabb offers checking accounts with no cost to set up, no minimum amount to open, no monthly service fees, and really, no other fees that I could find. They are truly an awesome bank to work with (although their rates are not as high as others so I only use them for my travel account).
HERE’S THE GOOD PART, on top of offering world class security and 24/7 service, they will reimburse any ATM fees you incur during the month (I think up to $25). This includes fees from international banks which means you only pay the exchange rate.
There is a whole list of other great features that comes with opening this account as well (like depositing a check with your smartphone), so if you missed the last link, HERE IT IS.
There are only 2 downsides that I found with this account. It’s kind of a pain to open to begin with. Lots of paperwork, two forms of ID, and having to be there in person.
Then, twice I have forgotten to check on my account and I ran out of money, and the transfers took about 5 days to clear. My fault, I know, but it’s a pain to wait that long with no cash. Still I wasnt charged an overdraft fee, and these two downsides are really just testaments to their commitment to good security and proper procedures.
Travel Credit Card:
As I’ve said before, my debit card definitely gets a lot more frequent use while I travel, but all of the heavy lifting (plane tickets), online purchases (hostel bookings), and expenses in developed countries are handled by my credit card. Once again, without the right research, one can pay hefty, hefty fees for international credit card charges.
The credit cards in most people wallets are not exactly travel cards. They may or may not come with an annual fee, they probably have some sort of points system or cash back bonus, and they work great for every day expenses, but they are not designed for travel.
These cards will undoubtedly have some ridiculous fee for international use. Some of them have a surcharge just to USE it, then also charge a percentage on top of that. Bottom line is…
If you use these cards abroad, you’re not gonna have a good time.
In this case, there really isn’t a Holy Grail of travel cards. There is a plethora of options, and which option is best really comes down to the individual, so I really can’t recommend just one card.
What I CAN do is tell you the card that I use and recommend.
Currently, I am using the Barclay Arrival card with an annual fee of $89/yr. With this card, I was given a healthy frequent-flyer-miles bonus, I get 2 miles for each dollar I spend, and most importantly, I pay 0% on international transactions (still have to pay exchange rates). There is also an option with no annual fee, but the rewards are not as good.
Personally, I don’t recommend getting a card with an annual fee unless you KNOW it’s going to pay for itself in rewards points, and I think mine already has, but the truth is that I only signed up for it in order to get the bonus miles.
I’m trying my hand at “travel hacking” which is the idea of getting free flights by acquiring enough bonus miles. I’m planning on canceling the card before the year is up, but we’ll see. And before you start screaming about credit scores taking a hit, there is a whole other post coming on the subject.
One last thought…
I know that many of my readers are from countries other than the U.S., and unfortunately some of the information I have provided is only good for American citizens (Charles Schwab accounts). However, the principle still applies…
Do your homework, get the right plastic, and you can save a lot of money in the long run.
Just one or two hours of research and filling out applications can literally save you HUNDREDS OF DOLLARS (or whatever currency you want) over the course of your travels.
I don’t know what country you might be from, but I’m sure there is a bank that will be able to offer you some sort of great debit card. If you find one, PLEASE share it in the comments so other will be able to see.
And if you need some help finding a great credit card for travel, check out NerdWallet’s tool for finding the right travel card. I know many credit card companies have international branches.
Welp…that’s it for today. I hope I was able to help you, and it would really help me if you Like, Share, and comment on the article 😀