This is a contributed post.
Financial management is usually not a top priority for many Brits when travelling. It should be an element of the planning process to help avoid any incidents when abroad. And it’s critical for all travellers to understand the circumstances of their international finances when travelling. Even even though 32 million people use credit cards in the UK, a majority are uninformed about the additional charges that apply when used abroad. These charges can build up quickly when the card bearer conducts more transactions away from their home country, and they can be avoided with some careful planning. Read further to learn more about managing your finances as you travel.
1. Open a bank account with little or not international fees
While abroad the primary way to access cash is to use your debit card at a cash point / ATM. ATMs have become increasingly popular in the last two decades. They help avoid the inconvenience of carrying huge sums of money in its physical form. However, there is a problem that seems to manifest once a traveller has returned home and has seen their statements. Have you noticed that your debit card charges are higher when used abroad than when in your home country?
Bank charges tend to be higher for withdrawals in this case because of the complex systems involved. To mitigate these unexpected high charges while you’re travelling, it helps to take some critical measures before you leave. First of all, open a new account with an entirely different bank that offers little to no international fees on its debit cards. If your choice is to stick with your current bankers, you should apply for an international debit card instead of using your regular one.
For example, the UK’s Lloyds TSB Bank charges 2.99% and a 1.5% fee on foreign exchange and cash withdrawals, respectively. So imagine if your trip will last for a month, are you willing to accumulate these fees? Fortunately, banks such as HSBC offer free withdrawals from any part of the world. However, HSBC ATMs are not available in every country and you will need to use other machines to access your money. This is why an international debit card or a new bank account (devoid of international charges) will be convenient for you.
2. Access adequate funding before travelling
There is nothing more inconvenient than running out of cash while in a foreign land. Besides the security implications that come with it, your options become severely limited without any financial power. This is why you should access adequate funding to sustain you throughout your trip. Sadly, it has become challenging to borrow from regular banks, but with Evolution Money, you can access secured loan options. This facility will help you draw up a flexible repayment plan that suits your circumstances. With a twenty-year (maximum) lending term, you will have enough room to repay your lenders.
3. Stock up on some foreign cash before travelling
This is the most logical thing to do when you are about to travel. Depending on the country you’re travelling to, you should have some physical cash in the currency of your final destination. These come in handy when you have to catch a cab, eat from a restaurant, or catch public transport. Besides, local cash saves you from the stress of locating a particular bank’s ATM at the airport.
It is also worth knowing that if your destination is a developing country, the chances of finding an ATM within the airport premises are slim. The exchange bureaus can be helpful as well, but you should know how to detect counterfeit currencies. Did you know you can order foreign cash from your local bank? Absolutely! But you will have to give your bankers a few days notice.
It is worth doing your research on where you can exchange for the foreign cash, in some cases, it cannot be purchased outside of its country, like with Morocco. So you’ll need to plan accordingly and within the guidance of the country and currency policies.
4. Link your current and savings accounts
It helps to keep 80-90% of your funds in a savings account. With this option, you can switch seamlessly between that and your travel-friendly current account (remember point one). The advantage to this system is primarily that savings accounts rarely have monthly charges (they earn interests instead), compared to a checking/current account.
By linking these two, you have the liberty to move money between both accounts should the need arise while travelling. Thankfully, internet banking makes it possible to set up regular transfers between these two different bank accounts. To avoid unforeseen occurrences while away, you should test this process a few times before jet setting.
5. Inform your bank about your travel and the new destination
Have you ever considered the option of informing your bank where you’ll be in a given period? If your answer is no, there is a crucial reason why you should do that. There’s no better time to start than now. When you travel outside your home country without informing your bank, an attempt to use your debit or credit card in a foreign land is interpreted as suspected fraud. And understandably so, as digital fraud is on the increase and it’s logical for your bankers to take precautions to safeguard your money.
Sometimes though, even after informing the bank before travelling, your card will still get blocked as soon as you use it in your new location. The reason here is due to the automated security systems that come with your card. The upside here is, you can quickly give the bank a call to have your debit or credit card unblocked. If your trip will be a protracted one, it helps to provide your new address to the bank to avoid inconveniences.
6. Use a travellers’ cheque.
Regardless of digital banking advancements, the travellers’ cheque continues to be safe, sensible, and convenient. Besides, they are accepted in a majority of countries around the world. The greatest thing about these little leaflets is that they can be replaced should you lose them. However, the old ones must be cancelled. There is a security method you should employ whenever you use travellers’ cheques.
Always note down the serial numbers and keep them in a safe place. This way, in case you lose them, you can still receive your money from the cheque provider. Keep in mind, a recollection of the serial numbers with their quoted amounts are required.
The next time you plan to travel, remember to prioritize how to manage your finances. As you have read here, some of these measures should be taken even before you embark on the trip. Your happiness on the trip will be mostly dependent on how adequately you have prepared.