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How to Avoid Hefty Foreign Transaction Costs When Traveling

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They say that travel broadens the mind, but it also empties the bank account.

Some costs aren't avoidable, of course, but there are plenty which can be sidestepped with a bit of forethought.

To that end, here are some steps to take so that traveling overseas isn't as much of a financial burden to bear.

Use a Credit Card That Doesn't Charge Fees

Not all payment card services are created equal, and there are some providers that deliberately dissuade customers from using their card elsewhere in the world by levying steep fees for each purchase they make.

On the other hand, if you apply for a credit card with a brand that's more attuned with the needs of travel fans, you can enjoy fee-free spending wherever you are.

This is particularly appealing to travelers who are on a budget and would rather defer the costs of their adventures by using their credit card allowance, rather than eating into their savings.

Think Before Using an ATM

Another type of fee that's common for travelers to encounter is the dreaded ATM withdrawal charge. Some machines will only spit out cash if you agree to a flat fee from the operator, but then you could be stung twice if your card issuer also adds its own fee on top of this.

The answer is to plan strategically and only take out cash from ATMs which are part of a network belonging to your provider. A quick online search should help you pinpoint a bank location that fits the bill.

Also remember that it's never wise to use a credit card to take cash out of an ATM, because this will almost always come with a large transaction fee, even if you are on home soil.

Steer Clear of Airport-based Currency Exchanges

Airports are geared towards globe-trotting customers, and every major air travel hub will have its fair share of booths at which currencies can be converted before an enjoyable flight.

This might be convenient, but it's also the most expensive way to convert cash to use while you're abroad, because the rates of exchange and the fees charged on top for transactions will be through the roof in this context. At an airport, you're a captive audience, so it's easier for these exchanges to hike their prices without repercussions.

The answer is to plan ahead and if you do need to convert cash, do this before you leave on your trip. You can get the best rates and the lowest fees from online currency operators, and have the cash delivered to your door.

Use Cash Once You Reach Your Destination

We just discussed how to avoid transaction fees when buying foreign currencies, and the main advantage of having cash available to you is that it can be used to make purchases without risking the chance of additional costs applying after you've arrived.

While it may be more convenient to pay for everything on card, paper money remains not only widely accepted but also untainted by some of the aforementioned administrative issues.

Just be savvy about how you store and spend your cash, because if you're flashing it in public in a place where you're a foreigner with little knowledge of the local language or the area, it could make you a target for crime.

Final Thoughts

There's no getting around the fact that to spend money abroad, you'll need to jump through a couple of hoops or put up with paying a price for each transaction. It's preferable to put in a small amount of work upfront to save you hundreds or potentially even thousands of dollars in the long run.

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