In this video, Jane Barratt shares her top five money tips for the global traveler. Figure out the currency exchange rate. Learn tips to use your credit card and cash wisely. Investigate whether you have insurance through your credit card or employer. Consider asking your HR department to prepay or cover costs that may increase your debt load if the company does pay you back before you payment is due.
- There's something so wonderful about taking a trip to another country, whether for business or pleasure. I've worked in five different countries and traveled to over 40 and have learned, sometimes the hard way, that unless you understand how exchange rates work and what things to look out for, you can get some nasty surprises on your return home. The good news is that there's been some great leaps forward with technology that allow you to get better insight into potential pitfalls before and while you travel. The days of travelers checks and exchanging cash at airports are, thankfully, long gone.
Here's my top five global traveler money tips. Get to know currency exchange rates. It's simple math that means how much can one unit of the currency where I'm from buy in the currency where I'm going. There's nothing worse than thinking something is reasonable to find out later that you significantly overpaid. Exchange rates for most countries change a little week to week, but even if it's a country you go back to often, keep in mind that things may cost more or less, depending on the exchange rate at the time you travel.
Use your credit card wisely. Credit card purchases are charged on the value the day you make the purchase but be aware that the credit card company sets the exchange rate and can sometimes give you unfavorable rates. Some specialty credit cards offer favorable rates specifically for travelers. Look into those cards if you travel frequently. Also, make sure the places you shop at don't charge in your home currency. You don't want retailers choosing your exchange rates. One important thing, though, avoid cash advances on your credit card.
If you don't have enough money in your account to cover basic costs, then you probably shouldn't be traveling. Charge whatever you can to your card, and don't take on the higher interest rates that cash advances bring. Also, use cash wisely. Unless it's a small amount, don't change your cash at the airport or any of those exchange bureaus. Simply go to an ATM and withdraw money, preferably from an established bank. Banks will give you better exchange rates than the exchange bureaus. Your best option is a local branch of your home bank or another big global bank.
Otherwise, use an established local bank. Try to avoid the dodgy grocery store type ATMs, and especially avoid carrying large amounts of cash. Tourists are great targets for thieves. You're disoriented, and whether you like it or not, you probably don't blend in. And don't forget insurance. The first thing to do is to see what sort of insurance is automatically given to you with your credit card, or maybe your employer covers you when you travel for work, or if your health insurance covers expenses in another country. Travel companies and car rental agents make a lot of money by selling you extra insurance.
If your employer, medical plan, or credit card already covers you, don't pay twice for the same thing. If you feel safer having travel insurance, shop around for it, and make sure it covers medical emergencies and refunds, in case plans change. Be careful of expenses when traveling for business. I've seen colleagues get into trouble when they take business trips and fund expenses from their own pocket, which they then can't pay off in a timely way 'cause it can take over a month for a company to pay them back. This means that they've increased their debt load to fund their company's business.
If your work asks you to do this and you can't do it at no net cost to you, explain clearly to your HR or finance department that you need them to prepay or cover the costs themselves. Don't hurt your own credit rating by financing your company's expenses. Traveling can be one of the most enriching experiences of your life. By understanding the value of what it truly costs, you can be free to enjoy the world without worrying about surprises later.
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