How to Avoid Fees While Traveling
While we’re far from the days of traveller’s checks, there’s still some apprehension toward managing money abroad.
There’s the addition of exchange rates factor in, and what about the fee schedule you haven’t thought about since you opened your account? How many of those will apply? Do you need to change money before you leave, how much, and where do you even go? I spent hours researching and weighing different accounts and methods to avoid paying unnecessary fees while traveling long-term. Here are some of the ways we keep things simple while staying constantly on the move.
Credit Cards
Using a credit card in-country can be the simplest and most direct way to make transactions. Whereas most debit cards will charge a small transaction fee to use the exchange rate, some credit cards will not. Read the fine print in the fee schedule to see if a “foreign transaction fee” is applied. Several travel or premium credit cards will even market that they don’t charge foreign transaction fees. This will save you ~1.5% per swipe, so even if there is an annual fee, it will probably pay for itself (though many don’t have annual fees).
Apple Card — The titanium, numberless card from Apple issued by GoldmanSacs is our everyday card while traveling. As of this summer, cards can be combined into joint accounts contributing towards each owners credit, but more importantly, can be co-managed. We each get notifications for every transaction and can each see the balance and make payments. A credit card in general is more secure and easier to dispute fraud, but the Apple Card lacks physical numbers and generates a unique code per transaction making it difficult to track. Even if the digital number (for online transactions) is compromised, a new one can be requested without requiring a new card to be shipped (and routed to whatever country you’re in). The card has no fees at all and instantly converts currency using the daily exchange rate. Apply from the Wallet app on your iPhone.
Marriott Bonvoy by Chase — This is our secondary card. While it builds status with Marriott, more importantly, it has an insurance policy that will cover travel disruptions and car rentals (excluding liability). This allows us to waive coverage from rental companies without having to use our policies in the U.S. For more specific cards like this, I only recommend them if they don’t change your purchasing behavior (i.e. I already stay at least one night at a Marriott property per year). The $95 annual fee gives me 35,000 extra points/year (in addition to several other perks) that translates into ~$280 of purchasing power. So, the money I would have spent anyway gets stretched much further in that signal instance and multiplies the rewards I receive on transactions past that (i.e. Cabo or Granada). Research and compare cards that fit within your spending behavior.
Changing Money
What about cash? Do you need to change money beforehand? The answer is most likely no. Local banks will charge you around 10% to “buy” foreign currency, and it can take a day or two to have it shipped to you home or the local branch. Airport exchanges are even worse; they charge closer to 30% to change currency. The best option? ATMs in-country.
I never carry cash at home, but there have been a couple times, even in Spain, that I’ve needed cash to make a transaction. When you use a debit card to pull money out of your account, generally, your bank can charge you a flat fee for using an out-of-network ATM (around $3-5 per transaction, noted in the fee schedule), but the foreign bank that owns the ATM will also charge you a fee (around 6€, not noted in your fee schedule). While still less expensive than a flat 10%, the fees can add up over time, so it behoves you to make larger, less frequent withdrawals.
The only way I’ve found to avoid these fees all together is with an Investor’s High-Interest Checking Account from Charles Schwab (Americans only). To open one, it must be tied with a brokerage account. At the time of writing, there are absolutely no fees for the brokerage account, and you can leave it at $0. The checking account doesn’t have any fees, but $100 must be deposited before the debit card is issued. It’s a bit of a pain to set up, but once it is, it’s lovely to have overseas. There are no out-of-network fees, but the selling point is that Schwab refunds you all of the fees charged by foreign banks at the end of the month. So if you need cash abroad, this is the only way I’ve found to completely avoid paying a fee for changing currency. Because of that, you can pull out what you need and don’t end up with a pocket full of 2€ coins that won’t work in Bulgaria.
For a full-time traveler, the savings are close to $500/year in ATM fees alone.
Use a VPN
A VPN, or virtual private network, is software that encrypts the connection to your computer. This lets you jump online wherever you need to (café, airport, train station, etc.) and be able to make secure transactions. You can also log on from your home country and keep your bank for constantly freaking out that you’re still gone. We use SurfShark because there’s no device limit.
Apart from that, everything stays largely the same. Because all of your finances are based in your home country, you just log on like normal and make the necessary credit card payments from your checking account.
Tips
If given the option between EUR and USD, select EUR. I’m finding the exchange rate is better from my bank than the point-of-sale.
Diversify your savings. Pick-pockets are always a consideration, so don't keep all of your money in one place. We have two sets of debit and credit cards and keep them in separate locations, so even if one wallet is stolen, there’s enough elsewhere to keep going until the stolen money can be recovered.
Maintain a set amount in the Schwab account in case you need cash quickly. ACH transfers between accounts take 1-3 days.
Look up to local words for credit card, cash, please wait, approved, remove, etc.
This post is not sponsored. The Marriott section contains a referral link.
