Vacationing Abroad? Look Out for 4 Added Travel Costs

What we'll cover:

• Pay attention to foreign transaction fees, exchange rates, currency conversion fees, and cellular roaming fees.
• By being mindful of these potential fees, you could keep more of your cash while traveling abroad.
• Before you take off, check in with your bank and credit card providers to understand any international travel fees they may charge.

When planning a vacation, you’re likely aware of the major expenses like transportation, lodging, dining, and gifts. But there are a few added costs that are often overlooked when traveling abroad.

Ahead, we’ll go over the extra charges that may catch you by surprise and how you could avoid them on your travels.

1.  Foreign transaction fees

When going abroad, if you use a credit card (or debit card) for purchases or transactions made in the local currency, you may be charged a foreign transaction fee. On average, this fee can land anywhere between 1% to 3%. While this may not seem like a big deal per transaction, these charges can add up quickly.

Before your trip, check with your bank and credit card companies to see what travel fees they may charge. A good place to start is by reviewing your card’s terms and conditions. Some credit card providers, like ones with a travel rewards program, may not charge any foreign transaction fees.

2.  Exchange rates

If you prefer to have some local currency on hand when you get to your destination, think about converting some of your dollars before you take off. That way, you’ll have some time to do a little research and secure a good exchange rate.

Generally speaking, you’ll want to avoid getting cash from the currency exchange kiosks or windows you find at the airport or in town, as they tend to offer unfavorable exchange rates as well as high fees.

Consider using a local bank ATM instead: You'll likely be able to get a better exchange rate than you would at a money exchange kiosk.

While you may be charged a fee for using your debit card at a foreign bank ATM, some US banks may waive or refund those fees for their cardholders. You can also check to see if your home bank has their own ATMs outside of the country, which could help you save on fees as well.

Check with your bank to confirm the details for international cash withdrawals and ATM access.

3.  Dynamic currency conversion fees

If you’ve ever shopped or made other transactions abroad, you may already be familiar with dynamic currency conversion (DCC) fees.

It can be easy to confuse a currency conversion fee with the foreign transaction fees we mentioned above, but they’re not the same thing. 

DCC is a feature that allows you to pay for things in your home currency instead of the local currency. While this might sound logical and convenient, be aware that you could get stuck with an unfavorable exchange rate and additional fees that could make your purchase more expensive than it would’ve been if you had chosen to pay in the local currency.

DCC is an optional service, so you can choose to decline this at the point of sale and opt to pay in the local currency.

By being mindful of these potential fees and choosing the right payment options, you could save money on your purchases while you’re abroad. 

4.  Cell phone fees

In the digital age, not many of us would choose to go completely off the grid when traveling. Most people want to stay connected to send text messages, check the map, plan activities, buy tickets, etc.

You may already know that many standard cell phone plans in the US do not provide free cellular coverage when you’re abroad. To help avoid costly roaming fees, you can ask your carrier about their international plans or add-ons that can reduce or eliminate roaming charges. It’s also a good idea to ask how you can track your data usage while abroad to avoid going over your plan allowance.

Some travelers may also choose to use a travel-friendly or local SIM card. This could be a physical SIM card you insert into your phone or an eSIM you set up on your device. However, before purchasing a SIM card, contact your carrier to make sure this option is available for your device. Depending on your carrier and device, you may need to “unlock” your phone before you’re able to activate a SIM card.