Smart money moves when traveling abroad

As we get into gear for international travel, spending some time preparing your finances before you board a plane could reduce stress once you’ve landed. Having a credit card declined because your bank suspected a fraudulent international charge could ruin a dinner on vacation, for example. Or failing to change your currency before leaving a "closed currency" country could force you to leave behind a significant amount of money. You could even run into problems after you’ve returned home, if you find you were charged a litany of ATM and foreign transaction fees.

Here are a few tips and considerations that can reduce such headaches related to foreign travel.

Cash can be one of the most cost-effective and convenient forms of payment when you're out of the country, but key considerations remain. For instance, you'll need to know the exchange rate. One helpful thing to do could be to know what the equivalent of $50 and $100 is in local currency so that you can quickly do the math when you’re buying a tasty meal or purchasing that amazing souvenir.

You’ll also want to know whether your destination is a closed currency country—meaning money can't be exchanged outside the borders. Keep this in mind because you'll need to either spend or exchange any remaining foreign currency before you leave the country.

And don’t forget to check into whether the country you’re visiting will refund the Value Added Tax (VAT) you pay on purchases. Many international airports in the country you’re visiting will help you process those refunds before you leave as long as you have the receipt and show your passport.

These days, the ongoing battles between thieves and financial institutions can create some unexpected collateral damage. Banks can quickly shut down your account after noticing your card was used in a foreign country. With effective monitoring in place to protect your card from fraudulent activity, before departing, it’s always a good idea to have a phone number on file with your bank in the event they need to contact you if a transaction comes into question.

Also, foreign transaction fees can rapidly add up when using your debit or credit card to make purchases or cash withdrawals abroad. Bring only the cards that you’re going to use, and the ones that you’ve confirmed don’t charge foreign transaction fees.

International ATM options can sometimes be confusing so pick the right ATM – preferably from a reputable bank that you recognize – to avoid unnecessary fees. If you withdraw local currency at an ATM, your bank could charge you $1 to $5, and you could pay 1% to 3% of the transaction amount. The owner of the ATM may even tack on an additional fee. Choosing the local currency when you withdraw money will eliminate the ability for the ATM owner to charge a fee and exchange rate that your bank may not be able to identify or reverse.

Letting your guard down while on vacation can lead to the kind of memories you weren’t necessarily hoping for.

Only bring the devices that you really need and can easily keep track of, and upgrade to the latest operating system before you depart so that you have the best security your provider has to offer. Remember to avoid public charging options, especially those in airports, to avoid hackers. Travel with your own charger. Also, disable your device’s ability to automatically connect to a local WiFi network. Where possible, use your phone’s personal hotspot or a secure password protected Wifi network.

While debit card fraud is a risk both at home and abroad, it’s one of the last things you want to deal with while traveling. Take common sense steps to prevent criminals from gaining access to your card number. When paying for a transaction with a credit card, use the chip reader rather than swiping your card when possible. Also consider limiting your debit card use as they typically offer less protection than credit cards.

1. Before you travel, research the exchange rates and fees for different methods of payment in the countries you'll be visiting.
2. When using an ATM abroad, choose the local currency to avoid additional fees.
3. Consider using a credit or debit card with no foreign transaction fees, or a debit card that refunds ATM fees worldwide. This can save you money on international purchases.

And when you’re ready to save for your next vacation, consider opening a high-yield savings account or Certificate of Deposit (CD).