When you’re traveling to foreign countries, your money spending habits can greatly affect you. What you’re used to doing might not be the norm in other countries. It’s always hard for me to see other travelers make these 10 mistakes when traveling abroad. It costs them more money and can easily be avoided by just becoming more aware. I provided the 10 mistakes people make with money abroad and what you can do instead so you can avoid them. I rather have you not pay for unnecessary charges and save your money instead. You can use that money you saved to have a glass of wine, or a cold beer, or a yummy treat in front of the Eiffel Tower or Balinese rice fields (or whatever you fancy).
1. Accepting torn, worn, or damaged notes
Whenever you pay for something and get cash back, always check the notes. Make sure that the notes are not torn, worn out, or damaged. I’ve accidentally done this a few times and didn’t pay attention to the quality of the notes when someone gave me back the money. Then, when I tried to use the damaged notes that were given to me, no one would accept it. In some cases, I lost money because no one would accept the payment. However, in other cases, some banks allowed me to exchange the notes for fresh new ones. Make sure to always check the quality of your notes when receiving money.
2. Not completing all the steps at the ATM and getting your debit card swallowed
Depending on where you’re from, you might be used to your ATM operating in certain steps. For example, after requesting the amount you want, you might be used to the ATM giving you your debit card and then having the cash come out. Whereas in other places, it’s the reverse: you take the cash out first and then you take the debit card. Where I am from in America, we take our debit card first, and then the cash will come out.
If you are used to a certain way of getting your cash out, you might forget to finish all the steps. There have been many people I’ve met that have had their debit card swallowed by the ATM machine because they forgot to take their debit card. For example, all of them were used to getting their debit card first and then the cash. But since they were in a foreign country that was doing it in reverse, the ATM machine gave them the cash first and then the debit card. Since they were distracted and used to the other way, they walked away and forgot to take their debit card. When you don’t take the debit card after a certain amount of seconds, the ATM machine will swallow your card. I swear, this has happened to so many people. Please don’t let this be you!
If this does happen to you and you used an ATM that was attached to a bank, some banks are able to retrieve your debit card. Most of them will do it at the end of the day and you might need to show your passport in order to provide proof that the debit card belongs to you.
3. Paying with your credit card without asking an important question
It is always wise to use your credit card instead of cash when you can, but a lot of times people forget to ask an important question. My friend, who is a very experienced traveler, mentioned he always pays with a credit card. However, when we were traveling together, I noticed he never asked the staff the important question.
The important question I’m referring to is: do you charge a transaction fee?
This is more common in Southeast Asia, but a lot of places will charge a transaction fee for using your credit card. Most of the time, they will mention they charge a transaction fee, but sometimes they do not tell you. Always make sure to ask if they charge a transaction fee. Some transaction fees can be up to 10%. This adds up when you’re traveling so make sure you ask before using your credit card.
4. Getting money out of ATMs in various locations
Although it’s very convenient to stumble upon an ATM at the grocery store, or 7-Eleven, or the hostel/hotel, it’s best to not use those ATMs. Not only do they charge more to withdraw cash, but the exchange rate will be a lot more than if you were to get money from a bank.
The best place to get money out of ATMs are the ones that are attached to a bank. The reason for that is because banks have better exchange rates and they generally have cameras and more security. ATMs that are easily accessible from the street (picture something like ATMs that are on the main street in the city center) provide the ability for scammers to put card skimmers on the ATM machine and steal your information. This is actually a common travel scam and it is also included in my 15 scams to look out for when traveling abroad.
5. Tipping without researching
As an American where tipping is a huge part of our customer service and culture, it was very hard for me to not tip in other countries that do not have tipping as part of their culture. Make sure to research if the country you’re traveling to tips or not. Also, look into how much they tip so you can tip appropriately.
If you are going to tip using your credit card, you need to tell the waiter the amount to charge before they run your credit card. In a lot of countries, they do not have the option to write the tip on the receipt or add the amount afterward.
6. Using your currency instead of local currency
Whenever you pay for something using your credit card, it will usually prompt if you want to pay in the local currency or your currency. Always make sure to pay in the local currency. Your bank will have a better exchange rate than the restaurant or store you’re at. I’ve tested this a few times and took pictures of what they would have charged me if I paid in USD vs what my bank actually charged me, and it was always a decent difference.
For example, on the left side ($53.56) is what my bank charged me because I paid the local currency. However, on the right side ($58.00), is what the store would have charged me if I chose to pay in my currency. So I saved roughly $4.50 just by clicking the “pay in local currency” button.
Also, even though it is very convenient when you see a sign that says “accepts USD” in another country, I recommend against using your own currency. It is always better and cheaper to pay in the local currency.
7. Using a debit card with withdrawal fees
Every time you use a debit card, the ATM will charge a withdrawal fee. A lot of places I’ve traveled to have charged up to $5 every single time you want to take cash out. This will add up fast, especially if you’re traveling full-time or long-term. To avoid unnecessary charges, you should get a debit card with no ATM withdrawal fees.
8. Using a money exchange or travelers check
Oh my… this makes me cringe every time I see someone do this. I’ve seen so many travelers, especially travelers trying to give other people travel tips, use money exchange places. Using money exchange places or traveler’s checks can be costly and have a higher exchange rate. If you absolutely need to exchange money, do not do it at the airport. The money exchange places at the airport will always charge a lot more.
Also, do not get the local currency at your bank in your home country. It’s always best to get the local currency when you’re actually in the country. You will have better exchange rates there.
9. Paying with a credit/debit card that charges you for foreign transactions
Why pay more money when you don’t have to? When you use a credit or debit card in a foreign country, your bank will charge a foreign transaction fee. To avoid getting charged, get a credit card and a debit card that has no foreign transaction fees.
10. Forgetting to inform your banks
When you forget to inform your banks that you’re traveling, your account can be frozen. Your bank might think there was fraudulent activity on your card, and therefore, freeze your account.
Make sure to inform your bank where you’re traveling to and the dates. Some banks are now getting rid of that requirement, but it’s always best to double-check before. It would be extremely unfortunate if you’re traveling and tried to buy something using your credit card, but weren’t able to because it was frozen.
Avoiding these 10 mistakes people make with money abroad will help you save money in the long run and avoid unfortunate situations. Traveling should be fun and I hope you can use these tips to avoid unnecessary events.