What to know about carrying and spending money abroad

Many Americans take the opportunity afforded them by summer vacation to embark on an adventure overseas. With airfares cheaper than ever and a practically infinite number of possible destinations, it's perhaps never been easier to see the world. But with travel come plenty of expenses, and special considerations need to be taken depending on the trip. Before you step out your door and head off to the distant land of your choosing, be sure you know the basics of carrying and spending money safely and effectively.

Finance prep

Like any other major expense, creating a budget for your trip helps immensely when looking to maximize value, as well as plan out your luggage situation. While carrying credit cards and spending money does not take up much space in a bag, souvenirs packed on the trip home will take up precious cargo capacity. Keep this in mind when budgeting out travel expenses. For this reason, it's generally advised to focus spending on experiences, including tours, dining, entertainment and other activities. Unlike physical souvenirs, these experiences provide lifelong and invaluable memories that require no additional space in your carry-on.

TravelBe sure to inform your bank and credit card providers as soon as possible if you plan to travel overseas.

In terms of how much to carry or what form to take (cash or card), opinions vary. Travel writer Rick Steves noted that there are many considerations to take into account regarding money overseas:

  • First of all, you will likely need to deal with currency exchanges. Check online for the most recent exchange rate between U.S. dollars and the currency of your destination shortly before leaving. 
  • Be sure to call your bank and credit card companies in advance to inform them of overseas travel. Banks usually ask that customers do this at least three days before leaving, but it's best to get this out of the way as soon as possible. Card companies may deactivate cards being used abroad if you have not informed them of your travel plans.
  • Wait until arriving in the new country and find an ATM to withdraw local currency. You may be charged a foreign transaction fee by your bank, but this usually pales in comparison to the high surcharges at currency exchange services at home or abroad.
  • Don't carry more cash or cards than you need. Even if crime is not a significant threat in your destination, losing these items overseas is a much more frustrating scenario than if the same happened at home.

With credit card technology now widespread, it's likely that travelers will not need to worry much about carrying and exchanging cash at all. However, many businesses, even in the most developed countries, still won't accept credit or debit cards. In addition, your card may include additional foreign transaction fees that you'll want to avoid.

Tips on tipping

A common source of confusion for American tourists overseas is tipping, specifically if, when and how to do so. Standard tipping practices vary widely from one country to another, and can even differ between establishments of the same nationality. A comprehensive list of global gratuity preferences is not widely available, but generally, Americans should expect to tip a little less than they are used to at home. 

In popular destinations like Western Europe, tipping at restaurants is generally accepted but much more modest - a 10 percent tip is often considered very generous. In some places, servers will include some form of "service charge" in addition to every table's bill. In this case, there is probably no need to tip.

For other services like taxis, hotel porters or tour guides, a small tip is always appreciated. Again, these are usually less than 10 percent of the total bill, or perhaps a euro for each bag carried by a porter, for instance. To get an expert opinion on the matter, try asking the hotel concierge or a native friend in your destination to get the inside scoop.

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