How to Travel Alone:
Managing your travel money

There are two sides to this post: managing the cost of your money while you travel and keeping your travel money (and therefore you) safe. The former is important because travel is expensive enough without incurring unnecessary fees and commissions for the right to purchase food, accommodation or services; the latter because the security of your money is doubly important when you choose to travel alone rather than with a companion

With a variety of money choices (debit cards, credit cards, prepaid credit cards, travelers cheques and, of course, cash) that all have pros and cons in terms of cost, convenience and security, there are some decisions to make concerning your travel money.

The cost of Travel Money

I’m not an expert in this area so, naturally, I went online to research the subject. I was surprised that there really wasn’t that much current, comprehensive, independent and reliable information on the subject. But I did find two sources that I thought better than the rest:

• “Travel Money Options” by Money Supermarket is the best video I found. It is UK focused. Here’s a link to the credit card comparison table for travel money that is mentioned in the video. I couldn’t find a similar comparison table for the US or Canada.
• “The Sleaze of ATM and Credit Card Fees“, an article by Rick Steves in World Hum, is another excellent source. This is US focused.

While I suggest that you watch and read both these sources, the key points from all the research are:

• The two main fees to watch out for are the foreign ATM fee and a foreign currency conversion fee. When withdrawing money from an ATM you can be hit with both.
• There can be a 10% differential in conversion fees between the best and worst cards.
• Credit unions in the US and the Post Office in the UK may offer low cost options.
• To reduce ATM costs, withdraw larger amounts so that you use it less frequently.
• Protect your PIN number when using your card anywhere.
• On your travels, you may be able to negotiate better deals from small companies simply by paying cash.
• Offers to charge you in your home currency are probably ways to grab more money by using a higher than standard currency conversion rate. Politely decline.
• Minimizing use of your credit card will reduce the chance of having your card information stolen and used.
• If your card has a PIN number, ensure that you know it before you leave.
• Let your bank and credit card companies know where you will be traveling and on what dates so that they don’t put a hold on your card for suspicious activity.
• Depending on where you’re traveling, cash may be your best option or your only option.
• Travelers Checks are still available but not as popular because they are not accepted everywhere.
• Use a calling card for making long distance calls.

My decisions concerning travel money

I have a trip to the UK coming up. I’ll only be away for two weeks and I don’t plan to make major purchases while I’m there so a lot of the money issues identified in these sources won’t affect me as seriously as if I were away for a long time. Based on the information above, I decided that credit and debit cards are my preference for convenience. If I was traveling a long time, I would probably take travelers cheques as well to keep the cost of debit withdrawals down. With this decision, I then:

• Called the companies of both of the credit cards I’ll be taking with me to:
• Let them know the dates that I’ll be in the UK.
• Find out their foreign currency exchange charge on all purchases. Both charge 2.5% above the actual exchange rate so there is no real advantage to using one over the other from that perspective. I’ll use the one that gives me better points.
• I called my personal bank to find out what fees they charge for withdrawing money from the UK. It’s $5.
• I called my business bank to find out if they have a lower fee for the same service. It is the same.
• I called a local credit union to see if they had lower fees for both debit withdrawals and credit card purchases as suggested by Rick Steves. The fees were the same as my bank.
• I called HSBC because they position themselves as an international bank. The good news is that if you withdraw from one of their ATMs internationally, there is no charge. However, I toured their sites for about 10 minutes and couldn’t find a bank locator. If you use another bank’s ATM the withdrawal fee is $3 for the HSBC part of the transaction. They don’t know what the other institution would charge. That made me consider going back to my bank to find out if the $5 fee was really only half the picture but, with the trip I have planned, there really was no need.
• I’ll withdraw money from a bank machine when I get there in large but not outrageous sums. This will avoid a few $5 fees yet not make me nervous about carrying too much cash.
• I’ll pay for most things with cash to reduce chances of fraud and since there seems to be no other way to reduce foreign currency exchange fees.

My plan.

So, while I did the leg work, the only thing I accomplished was informing my banks and credit card companies that I’ll be out of town. I really found no variance in fees. Is this because I’m in Canada? I’m not sure.

Keeping your money secure.

Finally, a video on keeping your money, credit cards and documents safe as you travel. I’m afraid the basics haven’t changed since I first started traveling in the 70s. Use a money belt — sleep with it if you’re in a dorm room in a hostel. Use your hotel room’s safe to guard valuables.

Related posts: