Money Exchange: 8 Things to Know Before You Go
Traveling abroad? Nabbing a great exchange rate is one of the best ways to save money.
Unfortunately, many international travelers make mistakes when converting their dollars to foreign currency. But, with a little planning you can find a great exchange rate and make the most of every dollar you spend abroad.
Here are eight things to know before exchanging money overseas.
1. Check what the official exchange rate is before you go
This will give you a benchmark that you can use to compare exchange rate offers. To see what the current exchange rate is, simply Google “currency converter” and select the currency at your destination.
2. Avoid currency exchanges at airports
A big flub international travelers make is exchanging money at an airport. Sure, it’s convenient, but that convenience comes at a price. Indeed, exchange kiosks at airports tend to charge significantly higher rates, since travelers who just touched down at their destination often need local money ASAP. Some airport exchange centers charge as high as a 15% premium. Thus, your best approach is to exchange for foreign currency at a local bank or credit union before leaving the U.S.
3. Find a bank that doesn’t charge commission
Be prepared to shop around if you’re truly determined to find the best exchange rate you can get. Some U.S. banks and credit unions charge commission and extra fees when exchanging currency, while others don’t. Find one that’s going to give you a fair shake.
4. Consider withdrawing cash from an ATM abroad
Withdrawing money abroad using a debit card means typically you’ll get a better exchange rate than you’d get from a bank or credit union, a recent study from WalletHub of the most popular currency exchange services found. But, make sure you’re bringing a debit card with low international ATM withdrawal fees. This NerdWallet chart shows that the foreign ATM and debit card transaction fees are at more than 20 national and online banks. Some financial institutions (Alliant and Ally) charge fees as low as 1%.
Pro tip: bring a small amount of cash with you so that you have a little money to pay for any expenses you’ll have to shoulder before you can access an ATM, like taxi fare from the airport to your hotel. Also, don’t forget to notify your bank of your travel plans before you go—if you don’t, your bank will likely freeze your account when you start making withdrawals or purchases abroad.
5. Only exchange as much money as you’ll need
Ideally, you want to only get as much foreign cash as you need for your trip. Why? Because you’ll end up paying an exchange fee again to convert any money you have leftover back to U.S. dollars when you get home. Also, you don’t want to be carrying around a ton of cash; cash is untraceable, meaning if it’s stolen there’s no way to get it back.
Granted, this entails figuring out roughly how much money you’ll have to spend on your vacation. The best way to do this is to use a spreadsheet. There are a number of travel-budgeting spreadsheets that are available online for free. Our favorite is this easy-to-use template from Vertex42.com. As you enter your travel costs into the worksheet, the handy pie chart will show you exactly where your money is going based on spending categories (e.g., hotels, meals, flights). Pretty nifty.
6. Forget about using travelers’ checks
Though travelers’ checks were once a popular option for exchanging money, they’ve largely been replaced by debit and credit cards, especially those with no foreign transaction fees. Another reason to steer clear travelers’ checks: they can be a hassle to exchange, often requiring you to hunt down a bank at your destination that accepts them. And, FYI: many banks no longer accept travelers’ checks, and some banks charge a fee of 1% to 3% for cashing them. Also, fewer stores and hotels accept travelers’ checks than in the past.
7. Find out what form of money is widely accepted
How you pay for things while on vacation depends on where you’re going and what form of money is commonly accepted there. In some countries, such as Sweden, cash is on the verge of extinction, as more hotels, shops, and other merchants are only accepting debt or credit cards. However, in countries like Germany, cash is still king. Cuba, for example, doesn’t have the infrastructure in place for widespread acceptance of credit cards. (Also, American dollars are subject to an extra 10% fee in Cuba on top of all exchange rates!)
8. Use a credit card with no foreign transaction fees when you can
No matter how much research you do, chances are you’ll essentially “lose money” when exchanging dollars for foreign currency, since you’ll get hit what some type of fee. That’s why Bill Hardekopf, a credit expert at LowCards.com, recommends international travelers rely on a credit card with no foreign transaction fees when making purchases abroad, such as the Chase Sapphire Preferred card, Barclaycard Arrival Plus World Elite Mastercard, or United MileagePlus Explorer card.
The caveat? Because credit cards with no foreign transaction fees often have higher interest rates, they’re not right for everyone. “You shouldn’t have a rewards card unless you’re going to pay off the balance each month,” Hardekopf says.
A record-high number of travelers are taking cruises. According to the Cruise Lines International Association (CLIA), about 28.5 million people set sail in 2018, up 7% from 2017. Americans, in particular, are fueling the industry: 14.2 million U.S. citizens took a cruise last year. However, many first-time cruisers make mistakes that can cause them undue stress or drive up the costs of their vacation. If you’re planning your first voyage, you don’t want to be one of them. Here are 11 blunders to avoid on your maiden cruise. Mistake #1: Waiting to reserve excursions till you’re on the ship Many seasoned cruisers book land excursions far in advance, since making a reservation ahead of time guarantees they’ll reserve a spot. (Popular excursions, unsurprisingly, sell out!) Also, many cruise lines offer deals for early bookings. The caveat? Depending on the cruise ship’s policy, some excursions may be nonrefundable. Mistake #2: Overlooking cruise line loyalty programs Most cruise lines, including the four largest in the world—Carnival, Royal Caribbean, Norwegian, and MSC Cruises—have free loyalty programs that reward customers with points that they can use to receive reduced cruise fares, cash back to spend aboard their ships, or other perks, such as priority boarding, member parties, private concierge services, and complimentary meals. Though some cruise lines automatically enroll members following their first sailing, others require travelers to opt into the program—sometimes before they board. So, find out what the sign-up process before you make a reservation. Mistake #3: Only booking directly through the cruise line Booking a cruise directly through a cruise line is convenient, but it’s not your only option. Plus, travelers can nab cheaper rates by exploring deals on discount websites like Expedia, Cruise.com, Priceline, and Travelocity. Another perk: if you find a cheaper price after you book a reservation, many discount travel providers will match the lower rate and refund you the difference. That being said, it may make sense for loyalty members to book directly with the cruise line in order to receive rewards points. It ultimately depends on whether the lower fare from a third-party booking service offsets the numbers of points you’d get by booking with the cruise line. Mistake #4: Assuming the cruise is all-inclusive Typically, cruise fares only cover your cabin, meals, and onboard activities and entertainment. Be prepared to pay extra for drink packages, Internet, and gratuities. (Note: many cruise lines, today, use an automatic gratuity system that tacks on 15% to 20% tips) Find out what these costs are ahead of time so that you can budget accordingly. Mistake #5: Not switching your cellphone to airplane mode Even if you don’t make a single phone call or send a text message while you’re cruising, international roaming rates can cost hundreds of dollar. Also, you may get charged for simply receiving text messages. Thus, either turn on your cellphone’s airplane mode, or contact your carrier to inquire about getting a short-term international plan. (Turning off your phone when you board the ship works, too!) Mistake #6: Buying trip protection from the cruise line If you’re the type of person who likes to purchase travel insurance, look into buying an insurance plan from an independent insurance provider. Oftentimes, third-party insurance plans offer better coverage—and may be cheaper—than trip protection sold by cruise lines. Pro tip: Some premium credit cards offer trip protections—the Chase Sapphire Reserve, for example, provides not only trip cancellation insurance but also emergency medical and medical evacuation coverage. Mistake #7: Presuming your health insurance policy covers you abroad Put simply, your primary health insurance may not pick up the tab for hospital treatments or emergency medical expenses while you travel internationally. That explains why a report from Allianz Global Assistance found that 67% of all cruise related “billing reasons” for insurance claims are the result of an illness or injury. The morale: talk to your insurance provider to learn what your policy does and doesn’t cover abroad. Mistake #8: Not selecting your cabin’s location Obviously, when you book a cruise, you choose what type of cabin you want (e.g., an interior room, a room with a balcony, a suite). However, many people don’t consider where their cabin is located. If you’re prone to seasickness, health experts recommend staying in a cabin in the middle of the ship on a low floor, where you’re less likely to feel the “sway” of the boat. Booking a cabin that’s located near an elevator—or, heaven forbid, a night club—can also sting, especially if you’re a light sleeper. Mistake #9: Under-packing Over-packing, of course, isn’t good. (After all, why schlep around more stuff than you actually need?) However, under-packing is also a common mistake first-time cruisers make. Many ships have formal or smart-casual nights that require certain attire (some even enforce black-tie dress codes!), so pack accordingly. Also, pack some cool-weather clothes—a strong breeze can make it chilly on the deck at night. Mistake #10: Parking at the port Cruise lines tend to charge top dollar for guests to park their car at the ship’s first point of departure. To find cheaper parking, look for deals at nearby lots that are a short Uber or Taxi ride away. Plan to stay in town the night before your cruise? See if your hotel offers guests a special rate for you to park your car there during the cruise. Mistake #11: Not packing a carry-on for the first few hours On many cruises, especially large ships, you’ll hand off your luggage when you climb on board, and the ship’s staff will deliver it to your room a few hours later. Which is why you’ll want to pack a small carry-on bag with any essentials you’ll need during the first few hours, like a bathing suit, sunscreen, or medications.
The Best Day to Buy Airline Tickets
Cost-conscious travelers have always been obsessed with paying less for plane tickets, but as airlines consolidate, raise prices and fees, and slash amenities, gaming the system in search of a good deal has become a standard step in the booking process. As it turns out, there’s not an easy answer to the industry’s million-dollar question, but we’ve combed through the latest data to bring you the information, tips, and tricks that’ll help you find those hidden-gem fares. What’s the best day of the week to shop? First, the not-so-great news: if you’re strictly interested in the best day to hit the “buy” button, there really isn’t a one-size-fits-all solution. Though standard wisdom indicates that midweek purchases tend to be cheaper – FareCompare CEO Rick Seaney doubled down on this advice, telling Barron’s that to find a sale fare, “the best time is Tuesday afternoon at 3 p.m.,” thanks to airlines’ price-matching adjustments – the reality may not be so straightforward. The 2019 Air Travel Outlook Report from Expedia and the Airlines Reporting Corporation (ARC), which tracked Average Ticket Prices (ATPs) and examined billions of data points to identify travel patterns, determined that it’s cheapest to buy economy flights (both international and domestic) on Sunday and most expensive on Thursdays and Fridays, but a competing report claims that the specific date of purchase may not actually have that much impact. The most recent CheapAir.com Annual Airfare Study looked at 917 million airfares in over 8000 markets and found negligible cost differentials from day to day, with average lowest fares within $1 of each other. How far in advance should you book? Now for the better news: you might not be able to predict price drops by day of the week, but if you pay attention to the calendar, you should be able to find bargains. Though last-minute deals aren’t unicorn-level rare, you’ll likely get the best prices at least three weeks in advance. Instead of zooming in on a specific day to shop, CheapAir.com recommends booking within a window of 21 to 115 days ahead, depending on the season, with a domestic-flight sweet spot of 76 days before departure. The Expedia/ARC report also pushes for a long lead time, recommending that bargain-minded economy travelers book three weeks in advance for the lowest ATPs, and Skyscanner suggests a 21-day cut-off as well. “There are obviously a lot of factors at play, but Skyscanner has found that savings can typically be found three to seven weeks out from the dates of travel,” says Randi Imas, the company’s head of communications for the Americas. What are the best times to travel? And finally, the best news: When you buy doesn’t matter as much as when you fly, so you’ll be ahead of the game if you can keep your dates loose. Of course, there’s not a complete consensus on this front either, but the Expedia/ARC report found that the best day for an economy-class traveler to start a trip is Friday (for overseas travel, check Thursday departures as well), while CheapAir.com’s study declared Tuesday and Wednesday the least expensive days to fly, with average tickets costing $85 less than on Sunday. To complicate matters further, seasonality affects pricing as well – the CheapAir.com data indicates that US travelers paid the highest economy fares in winter and the lowest in fall, so if you have flexible PTO, plan accordingly. So how DO you find the best fare? To cover your bases, sign up for newsletters like Scott’s Cheap Flights for flash sales and mistake fares, follow your favorite airlines on social media for real-time deal alerts, and try flight predictors like Skyscanner, Hopper, or Google Flights, which closely monitor airline activity and let you know when to buy. “When considering fluctuation in ticket prices, economic states, and the increase in airline flash sales, it is hard to guarantee that there is a specific day or time that will offer the cheapest flight, so we recommend travelers set up price alerts to track a route’s fare to see how it can fluctuate and independently determine the best time to book based on their own criteria, whether that’s based on budget, dates of travel, or adjustments to departure or arrival city/airport,” says Skyscanner’s Imas. Suffering from buyer’s remorse? Don’t worry, airlines operating in the US are required by law to refund your money if you cancel within 24 hours of booking, at least seven days in advance of departure. If you missed that window, try Yapta, a site that tracks your purchased flights and notifies you if prices drop enough to trigger the individual airlines’ refund policies. Scored a great deal lately? Tell us how you did it in the comments below, and we’ll highlight our favorite strategies in an upcoming roundup.
The Most Expensive Travel Mistake (And How Not to Make It)
It’s every traveler’s worst nightmare: A good vacation gone suddenly bad. You may be hiking a beautiful trail in a national park, or practicing your rock-climbing skills, or learning to surf on a gorgeous beach. Then the unthinkable happens: A fall, a head injury, broken bones, or worse. You require a medical evacuation, hospital stay, and, after surviving the ordeal, you are presented with a medical bill for $100,000 - or maybe even a lot more. And the medical insurance you have in your home country? It’s not accepted in your current destination. Oops. Ouch. Sure, we said that accident was “unthinkable,” but the fact is, huge unexpected expenses can be avoided by travelers who do think ahead. The world of travel insurance can feel complex, expensive, and unnecessary, but not having the right kind of insurance, especially when traveling internationally, can be the most expensive travel mistake you can make. Here’s how to prepare in advance. Why travel insurance is worth the investment Why do we think of travel insurance as an “investment” rather than an “expense”? Because when you travel internationally, there is a strong likelihood that the medical insurance you have in your home country will not be accepted in the country you are visiting. In some respects, you are paying for peace of mind, of course: Knowing that, in the event that you are seriously injured or ill, you’ll be prepared with a health insurance policy that local medical practitioners and hospitals accept and are familiar with. In some cases, additional travel insurance can also deliver 24/7 emergency service, coverage against theft or loss of travel documents, and even language-translation services. Travel medical insurance For international travelers, “travel medical insurance” is the coverage that ensures that, in the event of a medical emergency in a foreign country, you are not liable for high out-of-pocket fees. It is a short-term, temporary policy covering health, injury, and emergencies. For example, if you are an international traveler planning to visit the US, it is recommended that you obtain a US-based travel medical insurance plan, which will be recognized by more doctors and hospitals in the United States, leading to an easier experience in the event that you seek medical care, customer service, or need to file a claim. (Note: Most of the better-known US-based insurance companies do not offer coverage to international visitors - coverage is offered by smaller US-based companies that specialize in international travelers.) What is covered by travel medical insurance In general, you can expect a travel medical insurance plan to cover any new illness, accident or injury, medical evacuation, and, in the regrettable event of a death abroad, the return home of the deceased’s remains. Generally not covered are pre-existing medical conditions, routine doctor check-ups, immunizations, pregnancy and childbirth, major dental work, or eye exams. Other travel insurance options In addition to medical insurance when traveling internationally, “trip insurance” can be appealing to some travelers. This kind of policy allows you to recoup some or all of your expenses in the event that you have to cancel or interrupt your trip, your trip is delayed, you miss a connection, lose baggage, car rental, and other specific instances itemized in your policy. A “cancel for any reason” policy, just as its name suggests, is more comprehensive and allows you to recoup some or all of your expenses if you decide for any reason at all that you need to cancel or postpone a trip. Cruise insurance works in a similar way, giving travelers a measure of security when they book a cruise that ends up being threatened by a significant weather event.
Read This Before You Renew Your Passport
When's the last time you checked the expiration date on your passport? If it's expired, you'll have to get it renewed before you can take your next international trip. You might even have to renew your passport before your next flight within the US, as some states are no longer accepting driver’s licenses as ID for flying domestically. The change took effect in 2018 when the Department of Homeland Security began implementing REAL ID Act, which will eventually require all states and US territories to adhere to stricter security measures for issuing state licenses. (Congress passed the law in 2005 in an effort to strengthen national security.) That may explain why US passport demand is at an all-time high, with 21,103,475 passports issued last year, up from 5,547,693 in 1996, according to the US Department of State. Despite all the commotion, many US travelers forget to renew their passports, says Arnie Weissmann, editor in chief at Travel Weekly, a newspaper that covers the travel industry. “Like a tetanus shot, a passport lasts 10 years, but there’s no doctor to remind you it’s time to renew,” Weissmann says. (Note: passports for children under 16 are only valid for 5 years.) Here’s everything you need to know about obtaining and renewing a passport. How to get a US passport If you’ve never traveled abroad, there’s a good chance you don’t even have a US passport. The good news is obtaining one is fairly easy. Your first step is to obtain the right passport application forms. You can pick up an application from any US post office, or download the passport application forms online (travel.state.gov) and print them out at home. If you’re printing the forms yourself, the federal government’s US Passport Service Guide says the materials “must be printed in black ink on white paper. The paper must be 8 1/2 inches by 11 inches, with no holes or perforations, at least medium (20 lb.) weight, and with a matte surface. Thermal paper, dye-sublimation paper, special inkjet paper, and other shiny papers are not acceptable.” Forms completed by hand should be filled in using black ink and submitted using only one-sided pages. You’ll also have to provide proof of your American citizenship, in the form of one of these documents: A certified US birth certificate issued by the city, county or state. (Call the government of the state in which you were born to get an official version with a notary's seal.)Records of birth abroad if you were born outside the USNaturalization certificateCertificate of citizenshipIn addition, you must prove your identity by providing any one of the following: Naturalization certificateCertificate of citizenshipA current, valid driver's license, government ID, or Military IDNext, you have to submit a photo with your application. You can get a US passport photo taken at the post office, or snap and print your own photo. Just make sure you’re wearing your normal, everyday clothes (no uniforms) and nothing on your head. You cannot wear glasses, and you must look straight ahead without smiling. The photo must be 2x2 inches. Passport application and execution fees change periodically. At present (October 2019), passports for US adults age 16 and older cost $145. For an extra $60, plus delivery fees, you can get a “rush” passport delivered within 2 to 3 weeks. (Routine processing takes 4 to 6 weeks.) If you’re applying by mail, you must provide a check or money order – credit and debit cards are not accepted. How to renew a US passport You can renew your passport by mail, using form DS-82 and submitting a new 2x2 inch photograph, if your most recent passport meets these five requirements: Is submitted with your applicationIs undamaged (other than normal "wear and tear")Was issued when you were age 16 or olderWas issued within the last 15 yearsWas issued in your current name (or you can document your name change with an original or certified copy of your marriage certificate, divorce decree, or court order)If your passport doesn’t meet those criteria, you’ll have to renew by applying in person using form DS-11, and follow the same steps that are required for obtaining a brand new passport (see above). Traveling internationally within the next two weeks? You’ll have to renew your passport at a Passport Acceptance Facility. (You can find the nearest office near you at travel.state.gov.) To avoid waiting in line all day, make an appointment online in advance. Don't dawdle! Your passport doesn’t have to be expired for you to renew it. In fact, some countries require that your passport be valid at least six months beyond the dates of your trip, says Tammy Levent, CEO at Elite Travel Management Group. As a result, Levent says the biggest mistake US international travelers can make is waiting until the last minute to renew their passport. Get a passport book – not a card Another common mistake people make, Levent says, is obtaining a passport card instead of a passport book. Passport cards are a lot cheaper – the application and execution fees combined is only $65 for adults 16 and older – but they’re not valid for international air travel; they're only acceptable for land and sea border crossings between the US, Canada, Mexico, Bermuda, and the Caribbean.