To avoid costly bank fees and foreign transaction charges, here are some of the best ways to pay when travelling abroad
Debit cards, credit cards, cash or travelers cheques... what is the best way to pay for things when traveling outside of Canada? This is a question I’m asked a lot. No one wants to pay extra bank fees or to be stuck with no way to pay in a foreign country. So, here are some tips on the best way to pay when you’re abroad.
Take a Variety of Payment Methods
First, I always recommend taking a mix of payment methods. Some local currency — or the currency most accepted there — a debit card to withdraw more currency if you need it and a credit card. Generally, a credit card is safer than cash, has more fraud protection than a debit card and you’ll get the best currency exchange rate.
Credit Cards are Your Best Bet
In June, a website called Card Hub conducted a study on converting exchange rates with credit cards found that Visa and MasterCard were the best.
The survey also found that using a credit card provided an average savings of eight per cent on exchange rates when compared to those from the banks and a whopping 16 per cent compared to the airport currency exchange locations.
Watch for Transaction Fees
However, this savings could mean nothing if your card has a foreign transaction fee. About 90 per cent of credit cards charge a fee to convert purchases made in another currency to Canadian dollars.
These fees usually range from one to three percent... and if you’re not careful, this can add a significant cost to your travel expenses. So check your credit card agreement.
To compare foreign transaction fees from various issuers in one easy spot, I recommend you visit the website CreditCards.com.
Inform the Company About Your Plans
Be sure to let your credit card company know about your travel plans, if not, those foreign charges could raise a red flag and your account could be frozen. It’s also a good idea to take a second card with you. This will come in handy should your primary card not be accepted for some reason. Finally, make a list of the international toll-free numbers for your credit cards in case there’s a problem and you need to contact someone about your account.
Claire Newell is the travel media expert for Global BC, host of the travel series Operation: Vacation, best-selling author, spokesperson, wife and mother of two.