We’re ramping up for a trip to Dubai. Part of any trip is figuring out how to best pay for expenses when traveling internationally. Here are some financial tips we put into practice when exploring the world.
Tip #1 – Bring Some of The Local Currency
We normally arrive at a destination with some of the local currency. At a minimum, we want enough to take a cab to the hotel, and for tipping. In preparation for Dubai, we ordered AED, the currency of the United Arab Emirates. We pay an exchange rate, but it’s worth having cash ahead of time. We don’t want to land from a 15-hour flight, late at night and find out the cab driver doesn’t take credit cards. Over the course of the trip, we’ll put spending on credit cards, but we do like arriving with some local currency.
Note on Getting Cash After You Arrive – We get cash prior to leaving, but if you need cash during the middle of your trip, here’s a tip: Find out ahead of time if your home bank has partnerships in the country you’re visiting. For example, Bank of America has a partnership with BNP Paribas. In Paris, we can go to the ATM, and pull out Euros at a favorable rate.
Tip #2 – Bring Credit Cards That Do Not Charge a Foreign Transaction Fee
Here are three credit cards we’re bringing to Dubai:
- American Express Hilton Aspire Card
- Bank of America Premium Rewards Card
- Citi Premier Card
These cards all have something in common, they do not charge foreign transaction fees. Many credit cards charge a fee for purchases made in foreign currency. This fee is often around three percent. At three percent a $3,500 vacation will generate an additional $105 in foreign transaction fees. If you have a no foreign transaction fee card, bring it! If you’re not sure whether or not your card charges a fee, contact you credit card company. We’re bringing three cards that don’t ding us for purchases made in foreign currency.
Tip #3 – Bring Multiple Credit Cards
Multiple cards provide a back-up if one credit card gets lost or worse, stolen. We’re bringing a handful of cards on our trip. If we lose our American Express Hilton Card, we’ll call Amex, tell them the card is lost, and switch our spending to our Citi Premier Card. We don’t want a lost card to put a pause on the trip. We’ll use one of our other credit cards, and deal with replacing the lost card when we return home. If we bring three credit cards, we may carry two with us during the day, and leave card #3 in the hotel safe. Multiple cards provide a back-up plan and can help ensure a more hassle-free trip.
Tip #4 – Bring Multiple Credit Cards Issued by Different Banks
If you look at the three credits we’re bringing, you may notice that they are issued by three separate banks: American Express, Bank of America and Citibank. Not only do we bring multiple credit cards, we make sure these cards are from multiple banks. Why is this useful? Let’s say we bring three cards from the same bank. For example, we currently have three cards issued by Bank of America.
- Bank of America Premium Rewards Card
- Bank of America Travel Rewards Card
- Bank of America Cash Rewards Card
If we bring these three cards to Dubai, we will have multiple cards, but if something goes wrong with one Bank of America card will the other Bank of America credit cards function as working back-ups?
Let’s say we’re buying a coffee mug at the Dubai Airport gift shop. We pull out credit card number one, our Bank of America Premium Rewards Card and attempt to pay for the mug. With flair and finesse we swipe the card at the cash register. But bad news, for whatever reason, Bank of America’s fraud prevention algorithm flags the charge as fraudulent and our card is blocked! No problem, we’re prepared, we have a back-up credit card. We confidently pull out Bank of America credit card number two, our Bank of America Travel Rewards Card. Once again (this time with a little less flair) we attempt to purchase the sought-after mug. Bad news again, whatever Bank of America fraud detection didn’t like the first time, they don’t like any better the second time. Now card number two is blocked. At least we have a third card, but wait…it’s also issued by Bank of America.
This is why we bring multiple cards from multiple banks. If Bank of America suspects our account is compromised, and puts a block on our cards, we’ll pivot to our Citi Premier card, or our American Express card. We can buy my coffee mug from the Abu Dhabi gift shop, the trip can go on, and we’ll sort out the blocked card later. It’s a form of diversification. Speaking of locked cards…
Tip #5 – Set Travel Notifications
We contact our bank and credit card companies ahead of time and let them know we’re traveling. This can often be done online. The bank will usually ask the dates of travel and the countries we’ll be visiting. This can help prevent the issues like the Dubai coffee mug incident.
Tip #6 Say “No” to “Do You Want to Pay in Dollars?”
If you’re in Paris, buying a scale model of the Eiffel Tour, and the person at the cash register asks, “Do you want to pay in Euros or Dollars?”, the answer is always “Euros”. If you pay in dollars, you’ll be hit with a higher cost due to Dynamic Currency Conversion. If you want to learn more about Dynamic Currency Conversion, look it up online, but for our purposes, it’s a way for merchants and payment processer to make money through inflated exchange rates.
When the person asks if you want to pay in Euros or Dollars, Pounds or Dollars, Pesos or Dollars, always pay in the local currency. You’ll pay in Euros, Pounds or Pesos, and your credit card company will convert the purchase price into your home currency at a more favorable exchange rate.
Money is part of traveling and we hope these six tips will help you with a better trip! Do you have money tips for traveling internationally? If so, let us know!