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What is economic welfare? 2:09
(CNN Business) - When traveling abroad, paying for what you want to buy can be stressful ... and expensive.
Not only do you have to deal with exchange rates, but you also have to worry about the fees charged by ATMs and credit cards, in addition to whether the transaction is secure.
- READ: The advice you should follow from the youngest person to know all the countries in the world
But planning a little before your trip and selecting the right cards can help you avoid most of the inconvenience.
Use credit cards in another country
If you are traveling to a country where relying on plastic money is possible, your best option is to use credit cards and avoid debits.
Not only can you accumulate points with some credit cards, but they also provide the highest level of security (much more damage can be done with a stolen debit card than with a credit card).
But beware of additional charges and fees. Some franchises charge a foreign transaction fee if you use your card abroad or buy something online at a store outside your country. However, there are others that do not charge additional fees. So be sure to read the terms of your card first.
When Daniel Tobias and his wife Jillian were preparing to spend 21 months traveling the world, selecting ATMs and credit cards without transaction fees abroad was essential to reduce their pre-cruise anxiety.
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Tobias said they used their cards for more than 90% of total land expenses, which they estimate saved thousands of dollars in fees and additional charges.
"When we visited countries without reliable access to Western banking at that time, such as Sudan, Ethiopia, Zimbabwe, Uzbekistan, we had to carry additional US dollars, but otherwise we depended on the cards," Tobias said.
Currently, you do not have to make large exchanges or have the elite card to avoid transaction fees abroad.
"The good news is that we have constantly seen that more and more cards eliminate transaction fees abroad," said Matt Schulz, chief industry analyst at CompareCards. "That is very good for consumers because traveling can be expensive enough and the last thing you want to do is spend more on fees and charges," he added.
Sites such as CompareCards, The Points Guy, Nerd Wallet and CreditCards.com allow users to search for credit cards without fees for overseas transactions.
Another thing you should also keep in mind, Schulz recommended, are the card networks that are used most frequently in your destination.
- READ: Three ways to travel the world and not break in the attempt
Visa and Mastercard are more internationally accepted than American Express, he explained. But if you travel regularly to China, for example, you may want to have Discover.
Another difference between US credit cards and those issued in other countries is that of the US. they use a chip and a signature for verification, while those from abroad tend to have a chip and a personal identification number or PIN. But Americans who travel frequently may want to get a chip and a PIN card. Providers such as Bank of America and Barclays offer these types of cards that can be used in the United States or other countries.
"This will not be a problem in the most tourist places," Schulz said, "but if you are a little off the beaten path, having a chip and a PIN card will help avoid some headaches."
Use ATMs for cash
In some places, your only option is cash. You just need to be careful about where you are going to get it. Retail exchange locations, particularly in tourist destinations, are generally not your best option, according to JP Geisbauer, a certified financial planner and director of Centerpoint Financial Management in Newport Beach, California.
He warns against the exchange of cash at the kiosks of an airport, at the train station or in popular tourist areas.
"These rates are almost always the worst possible," he said.
Instead, he suggests using an ATM.
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Unless your card exempts you from fees, there will be an associated cost when using an ATM abroad. But these charges are generally much cheaper than the conversion rates and related fees offered at exchange houses, Geisbauer explained.
Many banks charge an international ATM fee, which often ranges from $ 1 to $ 5 per transaction, as well as a foreign transaction fee or currency conversion fee, which is a percentage of the amount withdrawn, generally varies from 1% to 3%.
To avoid being charged so many fees, check if your bank has ATMs associated with the destination you are going to. That will at least help you avoid an out-of-network usage fee, if not the ATM operator access fee.
Also, keep in mind that some countries only allow PIN numbers of up to 4 digits at ATMs, Geisbauer said. So, if your PIN is longer, you may want to know the standard of the place you are traveling and think about changing it before leaving the country.
"Trying to change [your PIN] while traveling is not impossible, but it can be an unnecessary waste of time," he added.
But even the best cards cannot avoid user error.
Tobias recalled that he was quite sleepy when he arrived in China after a night bus from Kazakhstan and left his card at the ATM. Security measures were implemented and nothing was lost or stolen, but managing the loss and finding the Fed-Ex package with the new cards that the bank sent to them in Beijing was an additional and unexpected adventure.
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