The best way of spending money whilst abroad is always up for debate, but many travelers now carry a Credit Card as their number one option for those one-off payments to restaurants and hotels. In the past travelers often used things like travelers checks, and more recently people have tended towards Prepaid Cards (travel cash cards), Debit Cards, and even travelling with cash.
It’s always unwise to carry large sums of money around with you on holiday, but for those of us that don’t want to pay bank fees we sometimes end up taking the risk. By enlisting the help of a Credit Card for casual purchases, we don’t need to carry so much cash or be so dependent on Debit Cards.
How to use a credit card when travelling
Prepaid cards can be subject to hidden charges, so often just seem like a poor substitute for a decent Credit Card with no transaction frees.
If your Debit Card is stopped or lost, the Credit Card provides essential backup for anyone travelling alone, but more importantly, with a Credit Card you often won’t pay those niggling 2% to 3%, transaction fees like you would on a Debit Card. With a Credit Card you’ll also get the best exchange rate at the time of purchase, and earn points.
Some companies – hotels included – may even demand a Credit Card to guarantee your purchase by pre-authorising charges that you may incur.
With all that said, you will need to find the right card for international use: banks like Santander are often very good in this department. When you search for a Credit Card provider, you need to implicitly state that you don’t want foreign exchange fees.
A Credit Card always needs to be used in conjunction with some form of ready cash and possibly a Debit Card, as you should never withdraw money abroad, or buy foreign currency with a Credit Card. You should think of a good international Credit Card on similar lines as a prepaid travel card.
Additionally, with a Credit Card your purchases over £100 and less than £30,000, which are faulty or fail to materialise are protected under consumer legislation called ‘Section 75’.
Gap Year Money Management Tips
A great gap year will result in new friendships and life-long memories, so having a good financial plan and money management skills will help you to fully enjoy the experience. Worrying about running out of money or having your money stolen is no way to spend a trip — follow these tips to prevent financial problems during your gap year:
Make a Budget
List all the countries you’d like to visit and estimate how much you’ll spend in each place.
Take into account the cost of living in each place as well as the cost of transportation and activities, and be sure to pay for proper travel insurance coverage.
Carry a Cash Card
Debit cards often charge fees when withdrawing currency from a foreign ATM, and these can add up quickly.
Carrying too much cash can be disastrous if it is lost or stolen.
Understanding travel money rates and how to get the best exchange rates will save you money in the long run.
It’s also a good idea to split up your money, so try and keep a bit of pocket money where you can easily access while keeping your cards in more discrete place.
Be Culturally Sensitive
Get cash back in small bills rather than large ones — large bills may be difficult for local merchants to break and advertises the fact that you have a lot of money.
Feel free to barter in the marketplace, but realize that you will still end up paying more than a local on most items.
Be Street Smart
Pay attention to your surroundings before you withdraw money from an ATM, and realize that pick-pockets and scam artists typically operate in crowded situations such as the metro and major tourist attractions.
Keep your valuables out of sight and trust your instincts.
It’s fine to enjoy the nightlife, but remember that getting too intoxicated makes you a more appealing target.
While getting paid legally for work can be tricky due to visa restrictions, it’s completely possible to volunteer in exchange for room and board.
WWOOF, or Willing Workers on Organic Farms, is a great way to see a country’s rural side, and will allow to you to interact with locals and other like-minded travelers.
Harvesting grapes in France is another classic gap year activity — the work is hard, but the rewards include free wine!