Spending money abroad
I prefer to use my credit card as much as possible. When I’m booking here in the states and also once I’m abroad. This way you can accumulate the maximum amount of points on your card of preference. Just make sure you know whether the card charges foreign transaction fees or not. If it does, then you may want to opt out of using that card due to increased costs, likely 3%. Sometimes, it may still make since to incur the fees due to the points you stand to gain.
You will likely need actual cash once you are abroad. My rule of thumb, the farther I travel away from a large city, the more cash I will need. Even in big cities, you will need cash for: tips (think about services that don’t take tips on credit cards— bellhop, valet, maids, etc) and any small or street vendor.
Where to get cash? There is no perfect one size fits all answer. I will generally start with the airport money exchanges upon arrival to my destination. Often times these have the worst exchange rates compared to exchanges in the cities, but the airport is the most convenient place in my opinion. Hotels can often exchange money at a fairly decent rate but they usually have a maximum amount that they will exchange (sometimes per day). Even if I have researched and know that my best rate will be at a local exchange stop in the city, I will still exchange just a few dollars at the airport. That way I have money for a taxi (in the event it’s an old school taxi that doesn’t take credit cards) or any other small things that arise before I can do the bulk of my exchanging.
Check the exchange rates prior to leaving for your trip and screenshot them (this way you have access to them in the event you don’t have internet access when you need to review them). This way you can have an idea of what kind of deal (or not) you will be getting from the currency exchange.
You can also get cash from ATMs. Overall, the exchange rates are usually the closest to the real rates if not equal. But you need to consider these factors:
Does this seem like a safe ATM? I don’t mean, is it some sketchy alley, kind of safe, though that is important to consider— anywhere. I mean, have you even heard of the bank or is it at least the national or regional bank for that area or city? What is the likelihood that my information won’t be stolen?
What are the transaction fees?
What is your bank’s non network ATM fee? Usually a flat fee, on the order of $3 or less
Does your bank also charge an international ATM fee? Usually a flat fee, on the order of $3 or less + a percentage, on the order of 3%
Is there a daily maximum that I can withdraw? If you need more than the maximum daily allowance, then you’ll need to repeat the whole above (#1-4) process again.
So once you’ve gone through the above checklist, does the rate still come out as the best deal?
One credit card tip: to my dismay, a fair number of foreign places don’t accept American Express. I am still a loyal member but I always make sure to bring a non-amex card with on my travels.
Tax-free shopping abroad or Value Added Tax (VAT) refund
If you do shopping, typically in the EU, you are likely able to get a refund on the sales tax spent.
This is usually for purchases over a certain amount and on clothing or souvenirs. Just ask the sales associate at the store, and if your planned purchase qualifies, be sure to collect the proper receipts. These receipts can be redeemed in the airport when you leave the country, but you can also mail them in later from your home country.
Be aware that there may be more than one refund program. Which means that you must submit your receipts to the correct program.