If you are travelling the world on $10 a day, the last thing you want is hefty ATM and conversion fees from your local bank. This is where clever travel banking comes into play. By properly organising your online travel banking you can save money, cut your spending and make sure you don’t get a nasty surprise – like a blocked debit card! If ever there is a way to dampen the travel vibes, its a blocked bank card…
To learn everything you need to know about travel banking, let’s dive straight in! In this post, we shall cover…
- Avoiding ATM fees
- Getting excellent exchange rates
- Sourcing a travel card
- Informing your bank
Avoiding ATM fees
There is nothing more frustrating when it comes to travel banking than being charged unnecessary fees every time you make a transaction from a foreign ATM. Those transaction fees can be the cost of your transport or the price of a beer .
My number one tip for stretching your money further may seem a little counterintuitive but I suggest withdrawing large amounts of cash at once, rather than extracting money each day. I know that in certain countries it can leave you feeling a little wary if you are carrying large wads of cash on you, so investing in a belt with a hidden security pocket is a good move.
Here is exactly how you can eliminate those nasty ATM fees…
Choose a global ATM banking network (ones that have free ATM withdrawals). HSBC is one of the best choices out there. If you’re from the UK, I recommend Norwich and Peterborough; they have zero fees as long as you deposit £500 a month.
Always make sure to ask your bank about their fees before you hit the road.
Pick ATMs in secure locations at major banks – fees tend to be lower than ATMS in hostels, shops or bars.
Getting Excellent Exchange Rates
First things first for this step of travel banking is you need to familiarise yourself with the exchange rate of the country you are going to. There are a tonne of currency exchange apps you can download onto your phone but my favourite is XE Currency pro and its free!
My next piece of advice is to avoid currency exchange booths at all costs. Usually people flock to these at airports but this is the most likely place to get stung with high fees. The best decision is to use ATM machines in the country you are travelling to, that way you will receive the local currency.
On the road you will be bumping into fellow travellers constantly. If they happen to be travelling in the opposite direction to you, exchange your cash with them. I have used this trick quite a few times and swapped cash with plenty of travellers I’ve met on the road.
Sourcing a Travel Credit Card
There are several travel credit cards available (depending on where you are from) that allow you to transfer and withdraw money from ATMs with zero fees under a certain limit. There really are so many pluses in getting yourself a travel credit card but which one should you choose?
The chip and pin card from Barclays bank is a solid choice. This card allows you the freedom to pay for travel with your card and then redeem travel points.
If gathering airline miles is more on your agenda then the Chase Sapphire preferred card is a good option. This card comes with an incredible sign up bonus. You earn 5000 bonus points after spending $4000 in the first three months of opening your account. Sounds pretty epic to me!
Travel hacking is used by many backpackers (including myself) to get cheap/free flights and accommodation via rewards on credit cards.
No matter which travel credit card you decide to go with, make sure to have done your research an comparisons on which card will be the best travel banking solution for you. Check out my travel banking credit cards comparison table below for some more intel…
|Travel Cards||Pros||Cons||Star Rating|
|Chase Sapphire Preferred Card||No foreign transaction fee & flexible rewards programme||Annual fee of $95 after year one||5*|
|Barclay Plus Arrival Card||No Foreign transaction fees & redeem your awards with any airline or hotel chain||Not the ideal card for someone who spends less than $4,200 on credit cards a year||4*|
|Discover It Miles||Those who want to wait one year for full bonus||If you spend a lot, this isn't the card for you.||3*|
|Bank America Travel Awards||Get unlimited 1.5 points for every $1 you spend on all purchases everywhere||Not as competitive as Barclay Plus.||3*|
Informing your bank
If your bank notices unusual activity on your card (making transactions abroad) it may suspend your account to prevent fraudulent activity. However, when it’s you making those transactions, a suspended bank card is a major pain in the ass.
Prevent an unwelcome surprise by informing your bank of your travel plans before you go. They will often put a note on your account to ensure your card is not frozen when you use it in the country you are travelling to.
International Money Transfers
Sending money internationally between banks or using Western Union can be extremely expensive. I use Transferwise to send money, the fee is just 1% and your first transfer is free if you use this link.
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