Simple Tips for Making That International Voyage (More) Affordable

Guest blogger Odysseas Papadimitriou is the founder and CEO of Card Hub, a website that helps you find the right credit card and maximize its benefit.

We all know how routine it's become for prospective international travelers to scour comparison websites for the lowest possible prices on airfare and hotel accommodations. It's a smart strategy, after all, and can lead to significant savings. The thing is the same deal hunters too frequently ignore other means of minimizing travel costs, which, while perhaps less obvious, can help lower one's international travel tab by more than 20 percent.

What are these unheralded savings strategies? Well, it all begins with the intersection of plastic and currency conversion.

Save on Currency Conversion

We all know that international travel necessitates trading in dollars for Euros, Yen, Franks, or whatever type of currency is used in your destination(s). Most people therefore include a trip to the local bank or a quick stop at an airport kiosk on their pre-trip checklist, but credit cards and debit cards actually offer the cheapest and most convenient means of exchanging currency, believe it or not.

Visa and MasterCard, the largest global card networks, offer exchange rates that are 16.2 percent lower than those Travelex, the largest airport currency exchange provider in the US, charges for exchanging cash and 8.1 percent lower than what the average local bank charges for the same service. In other words, using a Visa or MasterCard card for the majority of your purchases stands to save you a lot of dough (or whatever the slang term for money is where you plan to travel).

At the end of the day, it's not a question of choosing between a credit card and a debit card, as the savviest travelers will carry both.  A credit card will provide excellent fraud protection on everyday purchases, while a debit card will provide you access to the cash that you’ll inevitably need at the same low Visa/MasterCard exchange rate.

Avoid Foreign Fees

The savings you can derive from strategic currency conversion are sure to dwindle if you don't get a card without foreign transaction fees. Somewhere around 90 percent of all credit cards and debit cards charge these fees, which typically amount to 2-4 percent of whatever you buy. Simply taking the time to double-check whether your card is part of the 10 percent that do not charge such fees and then applying for another card, if necessary, therefore provides another opportunity to minimize costs.

Oh, and make sure to get your no fee card squared away before you book any of your travel arrangements because you don't have to be on international soil for international usage fees to come into play. They're assessed whenever you make a purchase through a foreign-based company.

Look For Deals

You may have noticed that ever since the Great Recession credit card companies have made a habit out of offering lucrative rewards bonuses to people with excellent credit pretty much just for signing up for new credit cards. The idea is to get as many customers who pay their bills in full every month in order to better weather the storm of any future downturns, but far more interesting than the why is how you can benefit.

Opening the right credit card in the months leading up to a trip out of the country can score you a couple hundred dollars cash or a treasure trove of points/miles to put toward airfare or hotel reservations. The best such offer on the market right now is the Sapphire Preferred Card from Chase. It offers 50,000 bonus points to cardholders who spend at least $3,000 during the first three months, and they can be redeemed for either $500 in travel accommodations or $400 in cash.

Add $400 to the 16% savings garnered via converting currency with plastic, and you're looking at savings that could reach well over 20%, depending on your exact travel budget.

Avoid Merchant Tricks

Merchants are out to make money, first and foremost, and might even resort to taking advantage of their customers to do so. Shocking, I know. This reality is of particular concern to international travelers simply because we're often easy marks, standing there with confused looks on our faces, trying to convert prices into dollars in our heads. As a result, merchants are known to offer to convert purchase totals into dollars only so they can use unfavorable exchange rates and pocket a bit of extra cash.

The solution to this problem is simple: just say no. Leave purchase totals in terms of the local currency, and if need be, use your cell phone or a pocket calculator to get a better sense of how much things truly cost.

Final Thoughts

Traveling abroad is something everyone should do at least once in their life (and I'm not just saying that because I'm from Greece and now live in the US). Whether you're into history, food, art, culture, architecture, language, etc., there's certain to be something of note to experience in a foreign country. Besides, it's simply an adventure!

The problem, obviously, is the high cost of travel. But as I hope I've conveyed in this article, there are a number of ways to both save on travel and avoid the types of hidden costs that can bloat budgets. In other words, if you can swing it financially, now might be the time to pack your bags!

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