How to Access Money While Traveling Abroad
Online, April 14, 2014 (Newswire.com) - Many international travelers don't know the most effective way to access their money abroad. The answer to this question depends on many factors, such as the length of their trip, the amount of cash needed, and their travel destination. Some options may make more sense to long term travelers, such as volunteer abroad or intern abroad participants. To help international travelers weigh the pros and cons of each method, Cross-Continental Solutions has recently analyzed different ways of accessing money abroad.
- Accessing Cash by Debit Cards
This is probably the easiest and the safest way for travelers to access cash abroad. ATMs accepting international debit and credit cards are widely available throughout most destinations, including developing nations. There is usually a hefty fee of around USD$5 per ATM withdrawal, but some premium bank accounts may waive this fee. Also, it is important to be aware of the ATM daily limits of both one's home bank and the foreign bank, which is usually around USD$500, but can vary from bank to bank. Thus, it is often cost-effective to make one large withdraw instead of frequent small withdraws. However, travelers should be cautious as to not carry too much cash, so as to minimize the risk of robbery or pickpockets.
- Accessing Cash by Credit Cards and Pre-paid Credit Cards
Credit cards usually use standard universal currency exchange rates, but often add up to 3% for foreign transactions. Nevertheless, this rate is probably one of the best a typical traveler is likely to find. However, note that credit cards often start charging interest right away on cash advances and such rates can be quite high. For this reason, pre-paid credit cards are preferable when doing cash advances. Pre-paid credit cards are also a great option for travelers who don't have credit or have bad credit.
When using an ATM to cash advance one's credit card, be aware that ATM fees and daily limit still apply. Many banks can also do a cash advance if the traveler presents a credit card and official ID. In this case, there is usually no daily limit, but some banks may charge service fees of approximately five US dollars. It may be worthwhile to go with this approach since travelers can get a large sum of money at a good exchange rate without having to worry about their daily limit.
Due to the favorable exchange rate, credit cards are also good for daily spending whenever possible. However, many merchants may not accept credit cards and some merchants may charge extra for credit card transactions due to the processing charges.
- Using Traveler's Checks or Western Union
Traveler's checks are more secure than cash, but the exchange rates one gets with them is usually unfavorable and they are often hard to exchange, even at many banks.
Also, travelers can ask friends or family to send money through Western Union. Western Union has many store locations worldwide and the money can often be available within minutes. Although it varies by location and amount sent, there is usually a service fee of around USD$15 and Western Union's exchange rates are usually not as good as those offered by credit cards.
- Opening a Bank Account Abroad
When spending an extended time in one country, it may be worthwhile to open a local bank account for easy cash access. After opening the account, one can wire some funds to their new account or do a direct deposit. For wire transfers, there is usually a banking charge of around USD$30 from one's home financial institution and an additional fee of approximately USD$15 from the foreign financial institution. A direct deposit, on the other hand, is usually done free of charge.
- Exploring Currency Exchange Options
Travelers should never use the foreign exchange services located in an airport since they almost always have terrible rates or hidden service fees. There are also exchange vendors on the street, but very few have good exchange rates either. When exchanging currency at banks, note that each bank often has different exchange rates, which are usually updated daily on their websites. It is wise to compare rates before exchanging currency at any bank. Credit cards usually have better exchange rates than debit cards and banks, even after considering the foreign transaction surcharge. On the other hand, debit cards and banks usually have way better exchange rates than exchange vendors.
The take home message for travelers is to try to use credit cards and debit cards as much as possible in order to get the favorable exchange rates. Also, it can be a safe bet to keep one's debit card and credit card in separate places to minimize the risk of losing both cards at the same time. Having USD$200 cash is often wise in case of emergency, and sometimes using US dollars instead of the local currency may give travelers better negotiating power. Last but not least, travelers should keep their bank well informed about their travel plans; otherwise their bank may block foreign transactions for security purposes.
Access free resources or plan a life-changing trip at http://www.CrossContinental.org.
About Cross-Continental Solutions:
Cross-Continental Solutions provides quality yet affordable volunteer abroad, intern abroad, cultural education, language immersion, and gap year programs. Many college students can take international internships for school credit. It is unique in that participants live and work side by side with the locals, thereby offering an exceptional cross-cultural experience for those who wish to make a difference. Programs are available at many locations around the world, including Africa, Asia, and Latin America.
