Remember how in the old days we would have to run to the airport or the local money exchange company to exchange our local currency for foreign ones? I remember the number of times I accompanied my father to the bank and then to a money changer to get some foreign currency, and boy was it taxing!
Today we rarely go through this process of getting our money exchanged before we go abroad because technology to a certain extent has changed the way we deal with money. While it is nice to be able to rely on our debit and credit cards abroad, it is also very expensive. Just imagine the exorbitant ATM charges for each withdrawal! All your hard-earned money, just washed away!
So how can you avoid these extra charges when you travel abroad? Well, essentially it comes down to understanding how to avoid bank fees, how to get rid of foreign transaction charges and how to get great exchange rates.
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Avoid Paying Them Bank Fees
When you travel abroad, you end up wanting to see, buy and taste everything! But all of these things cost money, and you don’t carry a lot of cash with you. Here is when your ATM card comes out, and then out again and then out a number of times thereafter. But did you know that the fee that you pay for each ATM card transaction amounts to a great deal of money? If not, then please continue reading.
ATM card fees vary across the world, on average they range from $5 to $10 per withdrawal. This amounts to $10-20 a week or between $40 to $80 a month, which is a ton of money if you ask me. In addition, if you are a shopaholic and constantly making purchases using your debit card, then these rates are bound to be higher!
Instead of spending all your money on paying ATM charges, you can open an account in a bank that has a global ATM network. This is basically a network of large banks that have waived fees and allow for free usage of ATM withdrawals. You can also opt to open an account in a bank that has a low fee such as HSBC ($2.50 per non-HSBC ATM usage).
Avoid Credit Card Charges
Most banks levy a $2-$3 credit card charge per purchase. This can amount to a lot of money if you think about it. Check with your bank for waivers, because a lot of banks do waive off transaction fees if you use your credit card a lot.
ood Exchange Rates
The more you use your card overseas, the more your local bank converts the transaction to local currency (for billing) and then takes a little of the top for themselves. Hence, what you see as the official rate, is not actually true, that is the interbank rate. To avoid being charged more, opt for credit cards. These are the companies that give you the best interbank currency rates. You can also opt to use an ATM instead, however don’t use ATMs situated in hotels or random places because their charges are extremely high.
Here are some more additional ways in which you can save more money:
Never Change Money At Airports
Airports have the worst exchange rates because they are so far below the financial food chain that they can not offer good rates.
Inform Your Bank That You Will Be Travelling Abroad
Banks often freeze accounts when there is some suspicious activity happening, like using your card abroad to withdraw money. Freezing the account means that you will be left stranded with no money and no back up. So, ensure you inform your bank before you leave about your trip.
Keep Your Bank Details Handy
Noting down your local bank manager’s number or bank representative’s number will go a long way when you find yourself in a sticky situation. Always keep a copy of this in your phone and diary so that you can reach out to them in cases of an emergency.