There are many hidden costs when it comes to spending money abroad, which is why in this blog post, I’ll be covering the top 10 money mistakes that travelers make.
- Not Selecting in Local Currency
The first money mistake is not selecting to pay in local currency when you’re, given the choice. It may seem like it would make more sense to pay in US Dollars if you have a U.S. bank account, but this is rarely the case.
Always use the local currency. As the rate is going to be significantly closer to the official market rate.
- Not Paying in the Local Currency
On a similar note, another common money mistake is not paying in the local currency when you’re using cash.
You may find that when you’re traveling, you’re quoted in both the local currency and in U.S. Dollars. If you have ever been on vacation in the Caribbean, you’re, probably familiar with being quoted a USD price for your souvenirs as opposed to the Jamaican or Bahamian dollar.
Both USD and local currency are often accepted, and that particular vendor is creating their exchange rate when they give you the price in USD. Before you make a payment, ask what the price would be in the local currency.
Oftentimes, you’ll find that you’re getting a better price if you pay in a local currency and then once you decide how you’re going to pay, don’t make this next money mistake.
- Failing to Negotiate
If you’re at a market or shopping anywhere, where the prices are not displayed, there’s often room for negotiation. In Thailand or Vietnam, for example, the starting price could be up to 10 times more than what they’re willing to let it go for. So always remember to negotiate, but then don’t go overboard.
- Not Counting Change
Another common money mistake that travelers make is not counting their change. Money mix-ups are very common since the notes of various amounts in some countries can look quite similar.
Sometimes, these mix-ups happen by accident, but sometimes not so. It doesn’t matter how nice the shop owner is, please count your change. Avoid any accidental money mix-ups when you are paying as well.
Look at what money you are handing over. The vendor may or may not tell you if you end up paying about 10 times more than the actual price.
- Not Knowing All the ATM Fees
Not knowing the ATM fees or the ATM withdrawal limits in your destination can be disastrous. ATMs will dispense local currency, making them a very convenient way to get cash with the debit card that you brought from home in some cases.
However, the ATM withdrawal limits can be very low while the ATM transaction fees are very high.
- Converting Money at the Airport
The next money mistake that travelers make would be converting money at the airport. The money exchanges know that tourists need local currency. So they push the prices up and you get a far inferior rate.
If ATM fees at the destination are high, then it may be worth bringing some money from home and exchanging them at a local bank outside of the airport once you arrive.
- Not Knowing the Fees for International Cell Phone Usage
A mistake that continues to cost travelers big time is not knowing the fees for international cell phone usage. To avoid excessive charges, check your provider’s website and then if in doubt, give them a quick call and see if there are going to be any additional fees.
- Not Calling Your Bank
One more phone call that you’re going to want to make before you leave home is to your bank. This is going to help you avoid the mistake where travelers end up having their accounts frozen and not being able to use their debit or credit card at their destination.
Some banks will allow you to enter your travel dates and your destinations on their online portal or through their app. By doing this, you’re preventing it from being flagged as a suspicious activity when your card is suddenly being used in another country.
A very common and very annoying situation is that, despite calling your bank and informing them of your travel dates and destinations, they may still freeze your account in a case like this.
It’s good to know what the process would be to unfreeze your account. Some banks will begin the process of unfreezing your account by texting a code to the phone number that’s on file. If you don’t have access to that phone number to receive texts, you could be in trouble.
Ask your bank what the process would be to unfreeze your account if you are flagged for suspicious activity before you leave home.
- Not Researching Tipping Culture
Another common money mistake that travelers make is not researching the tipping culture. In some countries, people tip for everything and not even small amounts. I mean like $15 or $20 on a restaurant bill or even every single drink that a bartender may make you.
This is not the case worldwide. In some countries, there is no tipping at all, while in other countries this may be a $5 that is expected as opposed to the $20 in other places.
Even if you’re traveling somewhere where tipping is expected, definitely check your bill. Oftentimes, you will find that there’s a service fee added to the bottom of it. So the tipping is already factored in and you don’t need to pay anything additional.
Let us know down in the comments what country you’re from and if tipping is expected.