6 facts you need to know about your finances ® abroad
Unnecessary, unexpected costs are the worst. So, to make sure your getaway isn’t full of them, bear these six financial facts in mind
You’ve been saving and saving for a much-needed getaway. You’ve paid for flights. You’ve paid for accommodation. And you’ve put money aside for day-to-day activities. All in all, a lot of money has been spent. So, the last thing you need is to spend more money being stung by unexpected expenses.
So, to help you avoid those unnecessary costs, here are six things to bear in mind before you go abroad.
1. Exchange your currency in advance
Don’t leave it until you land in a foreign airport until you think about exchanging your money - it’ll cost you. For the best rates, do your research online way in advance of your trip, this’ll a) show you the best offers, and b) allow you to lock in a rate before if it drops or rises.
If you’re doing it online though, there are a couple of things to look out for before you head to the checkout. Firstly, see if there are any delivery or handling fees. And secondly, make sure the site’s genuine and reputable.
2. Cash withdrawal charges
We’re used to free cash withdrawals with our debit card here in the UK, but don’t fall into a false sense of security while you’re abroad. You’ll usually be charged a conversion and transaction fee each time you head to an ATM machine, and the costs can soon add up.
The amount you’re charged will vary depending on the bank or building society you’re with, so it might be worth doing your research before you head overseas.
The same applies to your credit card too, although we’d never recommend withdrawing cash using a credit card - whether you’re on UK or foreign soil. On top of the one-off charge for using it abroad, you can also expect:
Another one-off charge because you’re using your card for a cash withdrawal; and
To pay interest on the money you take out.
In some cases, using your credit card to withdraw cash could even damage your credit history. Each provider will have different rules around this though, so it’s definitely worth checking out how yours treats ATM withdrawals before going ahead.
3. Choose the local currency
If you’re paying for something on card or withdrawing money from an ATM, more often than not, you’ll be given an option to pay in local currency or GBP. Although your default might be to go to the familiar British pound, don’t. Always opt for the local currency. This’ll make sure you’re not hit with expensive currency conversion fees.
4. Research roaming charges
Before you send that text to your pals back at home, make that call to let your family know you’re okay or post that all-important Facebook update, make sure you won’t be charged over the odds for it. See which countries your ‘free’ roaming applies to and make sure you stick within the do’s and don’ts of your contract.
5. Section 75 Protection
As with credit card purchases back home, products or services you buy abroad are protected by Section 75 of the Consumer Credit Act. Basically, this means anything you put on your card that’s £100 or more (anything up to £30,000) is recoverable, like if the company goes bust or the product’s faulty.
So, if you’re booking a spontaneous day trip while you’re out there, stick it on your credit card to give yourself that added peace of mind.
6. Let your bank know where you’re going
Let’s be honest, the last thing you want while you’re trying to enjoy a bit of a break is to be left stranded with no cash or on the phone trying to get things resolved, right?
So, last but not least, check in with your bank before you go and let them know where you’re heading to. If you don’t and you use your card abroad, there’s a chance they could think it’s being using fraudulently and they might end up blocking your account.
A quick call’s enough to keep your bank or building society in the loop, and some might even let you update your location using their app or online.
To protect yourself for every possibility, it might be a good idea to take a mix of payments types overseas with you - i.e. the local currency, a traveller’s cheque and your credit card. This’ll make sure you’re not left in the lurch if, for whatever reason, something goes wrong with one or the other.
Disclaimer: All information and links are correct at the time of publishing.