International travel can be expensive, but there are ways to save money if you are smart about how you travel. Here are some tips to avoid common international expenses such as transaction fees and roaming fees.
International Travel Tip #1: Use a credit card with no foreign transaction fee
Before you go abroad make sure you have a credit card that does not charge a foreign transaction fee. There are many credit card companies out there that still charge you a 1% – 3% fee for every transaction you make. This can add up pretty quickly if you are using your credit card to pay for big ticket items such as hotels and airline tickets (if ticketed from a foreign country).
The good news is there are more and more credit card offerings now that offer “no foreign transaction fee,” which is great because you don’t have to pay the extra, and you are getting the best market conversion rate at the time of your transaction. What’s even better is you can also earn cash back or points for all your foreign purchases. Whenever I travel I prefer to use my credit card as much as possible so I don’t have to deal with cash as much, and I can also continue to earn cash back without being charged any extra fees. A final perk of using a credit card is the protection the companies offer in case your card gets lost or stolen.
If you don’t have a card that offers free foreign transactions, you may want to apply for a new card before you go. Capital One was one of the first companies that offered this perk, and now, many companies like Chase and select American Express cards have followed suit.
International Travel Tip #2: Use the ATM
Forget travelers’ checks and money exchanges. ATM is the way to go if you want the best rate for cash in a foreign country. It is also the most convenient. I know some people may not be comfortable going to a foreign country without any cash, but most airports have ATM machines at the arrivals terminals, so you can always get money right when you arrive. Just in case, you may want to bring some USD with you so you can exchange if you do not have access to ATM when you arrive.
Most banks charge you a fee for using 3rd party ATMs outside their network, which can be $1-$5 for every withdrawal plus 1%-3% of the transaction amount as the foreign transaction fee. On top of that the 3rd party ATM owners can also charge you a fee on top of your bank’s fees. These can really add up, especially if you are using different currency or need multiple ATM withdrawals for a longer trip.
The good news is you can avoid these fees if you plan in advance. There aren’t too many banks out there that do this, but some do waive 3rd party ATM fees and some even reimburse you for charges from other banks. One such bank is Charles Schwab. You do need to establish a brokerage account to get started but you don’t necessarily have to trade to use the banking features. And it’s free of charge – no strings attached! It’s no wonder Charles Schwab has become my go-to travel bank. I have used this bank for the past 3 years, and I can guarantee you that they charge you the actual market rate for currency conversion and there are no hidden fees. They also have excellent customer service! (and no, they are not paying me to post about them…) Starting an account takes some time for security checks and such, so I would allow ~1 month before you trip to get your ATM card in the mail, although you may want to try to expedite if possible.
If you don’t have time to apply for a new bank account, you may want to check with your current banks about their transaction fees. Some banks charge a lower fee than others, so you may want to plan accordingly.
International Travel Tip #3: Carry a water bottle
I am a strong believer that water should always be free, but when you are traveling, you typically end up having to pay for water for the convenience. While a few bucks here and there doesn’t seem like much, it can eventually add up, especially if you are going through airports or other places that up charge on water. Be smart and fill up! You will also feel better for helping with sustainability!
International Travel Tip #4: Be careful with cell phone roaming fees
So you really need to stay connected to your social media network 24/7 and you have these urgent phone calls you need to make, and hotel WiFi is not always-on enough for you. If this is you, you may be tempted to just use your phone as is overseas and pay the phenomenal roaming fees. If you don’t have a good international plan these charges can be quite significant, and you can easily rack up hundreds of dollars in charges if you are not careful.
If you plan on traveling with your existing phone plan, you should check with your cell phone carrier to see if there are international plans you can sign up for. These plans usually come with discounted calling rates and some sort of package with text/data. In the US, some companies like T-Mobile offer unlimited data and texting for most countries, with no extra charge, so if you are a customer, you are already set.
An alternative to roaming is to purchase a local SIM card when you arrive. In some countries, especially in Asia, this is much cheaper than signing up for international roaming packages with your local carrier. For example, in Hong Kong, you can purchase a SIM card at the airport for ~USD$12, and you can sign up for the unlimited data/text that can last you for weeks, if you use your credit wisely. Those cards usually allow you to tether/hotspot so you can also give access to other devices (your companions’ cell phones, tablets, etc.).
If you only need data on the go, you may also want to consider renting a mobile hotspot. These are usually available online or at the airports, so you may want to check your destination before you leave and compare cost of that vs. SIM card vs. roaming. Some AirBnB’s even provide mobile hotspots, so you may not even need to rent one!
International Travel Tip #5: Make calls with WiFi
There are many free/cheap options for making calls if you connected to WiFi. My favorite tool is Google Voice. If you are from the US or Canada you can make free calls to all US/Canada phones using Google Voice. The key is to sign up for a Google Voice account (it’s free!) before you leave the country. Once you have a US/Canada-based phone number you can make a free call to US/Canada using the Google Voice app or plugin from anywhere in the world. If you do not have a US/Canada-based GVoice number, you can still make calls at very low rates. Reference rates information here. If you want to call using your cell phone, you will need to download the Google Hangouts Dialer app, which is available for free in the app stores.
Skype is also a great tool for making calls over WiFi, although they do charge you (low rates though) for non-toll-free number calls. Sometimes Skype offers better call quality than Google Voice, so you may want to have this in your back pocket as a back up for important calls.
Find these tips helpful? Feel free to share others or leave a comment below!