Travel is a luxury that everyone can have access to. Proper budgeting, smart destination choices, and patience are what visitors need to explore foreign places in the best possible ways they could. Of course, time is a serious factor to consider, especially that most people are full-time employees and seldom have absolute control of their vacation schedule. This also translates to the need for smarter use of money. Because vacays are ‘rare’ for the busy employee, he must ensure that every cent he spends is worth it.
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Not all destinations make widespread use of credit cards; in fact, many only accept cash. Therefore, it is oftentimes necessary to bring some physical money to pay for services such as a subway ride or products like sidewalk snacks. This also means that one will have to go to a foreign exchange company to have some of his money converted into the currency of the country he plans to visit. The amount of foreign currency he will get will depend on the exchange rate being offered by the converter. Getting the best deal does not end there. Some companies have high commission charges, while others do not charge such fee but offer not-so-competitive rates. Most crucial of all, it’s best to monitor the market and strike while the iron is hot. Exchange rates constantly change and nobody wants to miss out on opportunities. It’s also wise to check if banks offer preferential rates for their own customers.
Credit cards, as is always suggested, must be used with utmost caution. The convenience that cashless transactions offer often dangerously translate to heavy—and often unnecessary—spending. In short, how one can make meaningful use of his card will depend entirely on his discipline. As for traveling, it would be best to use credit cards that were specifically designed for overseas use. Such cards, as compared to everyday credit cards, offer smaller charges (foreign exchange fees, ATM withdrawal fees, etc.) and can be accepted in more shops, restaurants, or hotels.
Although they are no longer as popular as they used to, traveler’s checks can still offer some great advantages for vacationers. They are very secure to use and can be replaced easily when they get lost. However, they do come with a high cost, especially when factoring in commissions and some flat fees. Traveler’s checks, therefore, are best used when dealing with larger amounts.
Prepaid cards (pre-loaded bank cards) have the security feature of a credit card as well as the ‘controlled spending’ advantage of cash. They are ideal for the budget traveler as they often do not come with some commissions, annual fees, or late charges (except for application fees, of course)—helping them stay on budget while enhancing protection from theft or loss.
Of course, regardless of which payment option one uses, everything would still boil down to his financial health. It is not practical to spend a lot on travel if it will cause an imbalance in one’s budget. Traveling can certainly offer plenty of self-improvement, cultural, and social opportunities but it must not be done at the expense of one’s credit rating, educational fund, retirement nest egg, and overall financial well-being. When the vacay is still several months (or years) away, it would be best to build the travel money using income-generating instruments such as mutual funds, treasury bonds, or a personalized investment portfolio. Never act on impulse when there are airfare promos, too!