TIP # 1: Credit cards – Check if you credit card charges foreign exchange fee, which can be up to 3% of the transaction. It maybe a good idea to apply for a credit card with no foreign transaction fee. Chase sapphire preferred and Barclays Arrival are among my favorites for travel reward. However, they do carry an annual fee after the first year. There are also other zero annual fee credit card which also has zero foreign transaction fee, such as the lesser version of Barclays Arrival. Do your math to see which one makes more sense for you.
TIP # 2: Cash – Unfortunately, some merchants abroad only accepts cash. Check with you bank to see how much fee they charge for ATM withdrawals. Also, inquire about your daily withdrawal limits. For example, my checking account with Wells Fargo charges a fix fee of $5 per ATM withdrawal from a non-Wells Fargo ATM, regardless of the amount withdrawn. When I was studying abroad in the UK, I requested to have my daily withdrawal limit raised from $300 to $500 to save on transaction fees.
If you travel often, Charles Schwab’s checking account may be something to consider as they don’t charge foreign transaction fees or ATM withdrawal fees. They even refund you whatever the ATM charges you. However, please note that you may incur a credit inquiry when you apply for an account with them.
TIP # 3: It is generally a good idea to book travel in local currency . In the example below, Easyjet charges ~ 116 USD or ~67 GBP for a round trip flight from London to Geneva.
However, per today (3/5/2014)’s exchange rate (Google “GBP to USD” and the below converter would come up) ,
1 GBP =1.67 USD, so 67 GBP = 113 USD.
….which means that Easyjet charges 3% in foreign exchange fee! The difference in this example is small, but it could add up.