Travel need not be troubling

(This is a guest post from ThinkingMoney.org.  If you like what you've read, consider subscribing to their feed.)

When going on holiday one of the biggest worries is money. Having a budget and overspending is done far too often as we get carried away.

Traveling abroad has special challenges.  It doesn’t help that for some bizarre reason we seem to think that we are not spending as much if the note is not in the currency we are used to.  (I’ve often referred to Euros as a form of Monopoly money!)

Unfortunately, these notes are what make the world go round. Without them, the closest we’d get to our dream locations is through travel brochures. Thankfully, finance companies understand this need and see the opportunity to make some money as well.  The result?  Travel related credit cards.

If you’re anything like most people, you’re going to be so excited about a holiday, getting currency or sorting out your finances will be one of the last things you’ll do. You may even end up paying exorbitant rates at the airport, or if you’re like me, not bother with currency and just take your credit card with you.  However, I must stress how important it is to research the various credit cards available before you fly.

Here's a case in point.  One my first holiday I decided to do this without researching and was effectively slapped in the face when my card was declined trying to pay for my dinner that night.  (Surely there was some mistake?  So I tried it again. Declined.)  Embarrassment aside, I had no cash, and no way to pay for the rest of my time on holiday.

Thankfully I was with friends who loaned me money for the rest of the holiday.  Once I returned home I immediately inquired about my card declining, only to find it was the card itself that wasn’t compatible to be used abroad for purchases, but I could have used it at an ATM. As I did not know this I ended up borrowing money from friends and feeling guilty all holiday.

So I decided to tell my story and make sure others don’t have the same issue I faced.  Here are a few tips and points regarding travel credit cards:

• Apply for a travel credit card which earns points the more you travel. For example, one of the best value I’ve found is the BMI American Express Card, which gives you 20,000 bonus destinations miles. Pay for your holiday with this card, use this card whilst on your holiday too, soon enough you will have enough points to go on another holiday for free!
• Make sure you read the small print on every card you think about getting. You may think you know the withdrawal fees to use the card abroad, but there are certain companies that charge different fees depending on the country. If you’re unsure in any way, be sure to call them.  A little tip: record the call.  Make sure you tell them you are at the start and then record.  (MBH note:  Check to see if you actually need to inform them if you're in the US.  In many states only one party needs to know that the call is being recorded.) This way if they charge you when they said they wouldn’t, you have proof, and they don’t have a leg to stand on!
• Find out whether you can load money onto a travel card at a fixed exchange rate. Major travel companies like Thomas Cook offer these types of cards, and if the rate offered is good enough, you’re laughing, however if you use all the money on there and try and reload, you may find the rate is substantially higher. This is why I’ve found credit cards to be a better option.
• It’s always a good idea to take a backup source of funds with you. Keep one card on you, and the other card back at the hotel in a safe place.
• Let your card provider know that you are going on holiday. You may think why should they know? However the more you think about it, the more you may think that it makes sense for them to know. If unusual activities (transactions from another country) start occurring on your card, they will block the card, unless there is a note on the system advising them it is okay, they may even call you to verify but make sure you call them back instead of giving personal details over the phone to someone who has called you!

Then it’s just a case of enjoying a stress free holiday, leaving all the worry for when you return!