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How to manage your money while travelling abroad

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Financial planning may not be a top priority for the millions of Brits who will travel abroad in 2019. Although contemplating how goods and services will be paid for while on holiday may not seem particularly exciting, doing so can make a significant difference to an individual’s overall experience.

For example, focusing on how goods and services will be paid for can save significant sums of money. Meanwhile, contingency planning may also help to create a smoother and more enjoyable experience.

With that in mind, here are a few areas to consider before an international trip. These suggestions could prove relatively straightforward and worthwhile. They could even help to make that trip abroad more enjoyable.

Obtain a no-foreign-fee credit card

While 32 million people in the UK have a credit card, many of them are unaware of the additional charges that credit card issuers often levy when a card is used abroad. Many credit cards charge a non-sterling transaction fee of around 3%. Even for an individual who is abroad for a relatively short time, the cost of using a credit card that has foreign transaction fees can quickly become significant.

To avoid foreign transaction fees, it may be worth considering a travel credit card; these cards generally do not charge the cardholder a fee for international usage. Such a card could be used as a second credit card exclusively for international purchases.

In many cases, travel credit cards use the Mastercard or Visa exchange rate. Cardholders should therefore obtain a relatively attractive exchange rate, and the card itself should be widely accepted.

Pack some cash

While credit card acceptance has increased significantly in recent years, a number of retailers may still require cash to be used. This is the case in the UK and in many other countries, where independent retailers may be unwilling to pay the fees associated with accepting a credit card, for example.

As a result, it is logical for travellers to carry a modest amount of cash when abroad, to provide financial flexibility. If the amount they carry is within their travel insurance cover limit, losing cash while on holiday may not prove to be a costly event.

Plan for contingencies

If the worst does happen and a wallet or purse is lost while abroad, having contingency plans in place could be a worthwhile move. Although losing a wallet or purse only happens to a minority of international travellers, contingency plans could help to make a stressful situation less challenging.

For example, having the contact details of credit card issuers may be a prudent step to take. This will allow the relevant cards to be cancelled and replacements sent out. Similarly, having details of a travel insurance provider could help to speed up a potential claim. Keeping such details in a locked safe in a hotel room may be a good idea. In any case, keeping the details separate from a wallet or purse and ensuring they do not include sensitive information (such as a PIN) is crucial.

Final thoughts

While focusing on the financial aspects of international travel may not be a particularly enthralling idea for many people, doing so can lead to lower costs and a less stressful trip. Using the right credit card, having a modest amount of cash on hand and having important details about insurance and credit card companies could lead to a more enjoyable trip abroad.

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