It is easy to bleed money from exchange fees and transactions while traveling abroad.  Here are my top 5 helpful tips so that the wounds aren’t so devastating.



1.  Get an international travel-specific credit card.

This is a must.  There are many options out there, and it depends on which country you’re from, but I’ve chosen the Bank of America BankAmericard Travel Rewards because it has no annual fee.  (I use it as my normal credit card in the US, too.)

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  1. I can use this card anywhere in the world exactly as I would in the US, with no fees.  That means that I am not charged by Bank of America when I use an ATM abroad, and I can spend as much as I want, whenever and wherever I want, without any sort of international transaction fees.
  2. I can easily make purchases online.  If you ever work in another country and are paid through a foreign bank account, you will appreciate this.
  3. I can quickly build free points to use towards flights and hotels by charging all of my purchases to it and fully paying them off right away.  There is no catch unless you’re bad at paying off bills, I promise!!!  (FYI: If you plan on spending A LOT of money, a card with an annual fee will allow you to build more points and may be a better option for you.)


2.  Pay in local currency when using your card.

When you use your card, make it a point to ask the vendor if you can charge in local currency.  Otherwise, you run the risk of paying foreign transaction fees to the local vendor for charging it in your home currency without realizing it and getting a worse exchange rate.  If you have a credit card with no foreign transaction fees, like me, and you charge all of your costs in local currency, your bank will convert the charge using a more fair exchange rate for free-of-charge.  Sometimes, the vendor will ask you if you want to charge in local or home currency.  Usually, they’ll go ahead and charge in local currency if you don’t say anything.


3.  Always, always, always have cash, a credit card, copies of your debit/credit cards, copies of your important IDs, and international banking phone numbers on hand.

I’m going to explain this entire point through a story…

Before even leaving the airport after I landed in Hanoi, Vietnam, I lost my entire wallet.  I traced my steps back and quickly realized that someone had grabbed it.  I knew that I had to cancel both my credit and debit cards immediately.  Unfortunately, that was when I realized that I didn’t have any international emergency phone numbers for either bank.  (Ironically, helpful phone numbers are also on the cards themselves, which is another reason why copies are good.)

I couldn’t find wifi, either.  It’s pathetic how helpless I felt without Google.  So, at 2:00 in the morning, I begged my Vietnamese tour guide for his phone data and minutes.  After a very painful and slow search, I found both of my banks’ phone numbers online, and I sat on hold.  It’s a miracle that I made it through the first bank’s verification steps without any of my ID or card information, and I didn’t make it through the second on that long, long night.  Thankfully, I was able to get everything canceled the next day with help from my mom, and I had a few hundred dollars in cash in my backpack that I was able to live off during my 17-day trip across of Southeast Asia.

When I got back, I created a Dropbox folder that I can easily access anytime, anywhere, offline or online.  It contains copies of every critically important document I have.  This has come in handy for more than just travel-related reasons, too.  It also contains an emergency contact list that has the following phone numbers.  I carry this list as a paper copy in my wallet at all times, too:

  1. International Emergency Bank Phone Numbers
  2. Talk to the Nearest Embassy (From US & Canada: 1-888-407-4747; From Overseas: +1 202-501-4444)
  3. Report a Lost or Stolen Passport (From US & Canada:1-888-407-4747; From Overseas: +1 202-501-4444)
  4. Health Insurance Company
  5. Contact Information of 2 Relatives (For Others – What if something happens to me?)


4.  Understand the PPP (purchasing power parity) of any country you spend money in.

PPP helps you understand the prices of goods and services in different countries in comparison to your home country.  It tells you how much your money can buy in a different country, and whether it’s “cheap” or “expensive” for you to go there.

The Big Mac Index is a well-known table using PPP, but it is not the most reliable table.

I refer to this index for PPP:  Ratio of PPP conversion factor to market exchange rate

When you go to this website, find the country you’re interested in, and look at the number in the right column.  For example, 2016 shows the PPP for Japan as 0.90.  So, goods and services cost a little less in Japan if your home country currency is in $USD.  Needless to say, $1.00 can buy $1.00 of goods or services in the US; however, $1.00 will buy the same goods or services in Japan but will only cost you $0.90 in Japan, and you will have $0.10 left of that $1.00 to buy more goods in Japan.

For individual purchases abroad on a daily basis, after I’ve figured out the country’s PPP and looked at some comparative prices there, I use the equation:

(Cost of Good in Foreign Price) / (Official Exchange Rate) = (Home Currency Price)

Calculating the home currency price of an item abroad gives you a better frame of reference for purchase decisions.  If you calculate the home currency price for an individual purchase abroad and it is subjectively high, you have to ask yourself whether or not you think that expense is worth the item under those specific circumstances.  For the best overall picture, always consider the country’s PPP and look at comparative item’s prices alongside your home currency price calculation.


5.  If you plan on spending a good chunk of cash in another country, request foreign currency from a bank before you go abroad.

Ask your bank about requesting foreign currency.  My checking account is with TCF Bank, and they don’t offer those services, so I did some research.  Bank of America ended up being my go-to because they had multiple branches close-by me.

Before coming to Korea, I withdrew $1000 from my TCF Bank checking account and brought the cash to Bank of America.  For the amount of cash that I wanted to exchange, even though I didn’t have an open account with them, Bank of America did it free-of-charge.  They told me it would take 3-5 business days, but I was able to pick up the exchanged currency from them on the next day.



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