How to Withdraw Cash and Make Purchases on Your Foreign Vacation

Foreign vacations can prove to be very expensive, as they can involve huge bills for traveling, accommodation and all the fun things that you do. It is important that you pay attention to the way you spend money and make overseas purchases so that your expenditure is minimized. However, contrary to what most people think, the standard ways of executing financial transactions work equally well when you are abroad.

Use credit cards

The best way to pay for your purchases overseas is to use your credit card, especially for those goods or services which have a high price tag. You do not lose much in the exchange rate when you use a card. This is because the exchange rates offered by VISA and MasterCard for their credit card customers are the same as the wholesale rates that are offered to major banks. These are lower than the retail rates that you will get while trying to exchange your currency, say on the airport.

However, you should check the fees and charges for overseas purchases. Most credit card companies charge an extra fee for foreign currency transactions. This can vary from 1% to 3% of the purchase amount. Take a credit card that has the least fees and use it for most of your major purchases on the trip. This will make sure that you don’t end up paying more than you have to.

Use ATMs for accessing cash

The best way for getting cash when you are abroad is using ATMs. Always carry your ATM and debit cards with you on the trip. Your cards will allow you to withdraw money directly from your checking account with the same convenience when you are abroad.

As with credit cards, you’ll get a very good exchange rate when you use an ATM, but again, watch out for the fee. Each time you withdraw cash, your account could be charged a certain percentage as fees, or you may have to pay a flat $2 to $5 fee. It is advisable to withdraw a large amount of cash in one go, as long as you are sure you can safely manage it.

Most ATM cards have limits to the maximum amount of cash you can withdraw in a day so check these caps before you decide which card you want to take abroad.

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