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What’s the best way to spend money abroad?

Smiling couple enjoying a glass of wine abroad at a street side café.
April 24, 2018

By Kathryn Pins

You and your spouse want to celebrate an anniversary. What better way to celebrate than a trip to Italy? Wine tastings and shopping in Milan are all part of the plan. Sounds like a wonderful vacation, but how should you pay for all of it? Should you use a card or cash abroad? Should you exchange your dollars for euros? Do you visit the ATM once a day? Or, do you go cashless and stick to cards? You don’t have to get overwhelmed with fees and exchange rates. I’m here to offer some insight.

There’s a new way to make your money go further abroad.

If I wrote this post a few years ago, I would’ve told you to go to an ATM in a foreign country. Then, take out as much money as you can and put it in a money belt.

However, the way we use money has changed drastically. We are closer and closer to going cashless. In fact, 99 percent of transactions today are paperless. Cards are convenient for foreign travel and can have fewer fees. You won’t pay an ATM fee with every withdrawal, nor will you have to worry about unfavorable exchange rates when switching out your cash.

Use the card with the smallest foreign transaction fees.

Credit and debit card fees are often overlooked. It’s interesting how we will compare hotel rates for hours, but we forget to look at foreign transaction fees. When we get home, we realize how much we spent on exchange fees and credit card fees.

Before you go on your trip, compare your card fees because every card is different. (Don’t exclude your debit card from your comparison. There was a time when my debit card offered the lowest foreign transaction fee.)

If you don’t have a card with zero foreign transaction fees, get one. It will change the way you travel abroad. When you use a card with no foreign transaction fees, you save money on every single purchase. That includes your museum tickets, shopping and dining.

Also, when you don’t use a card, you miss out on the chance to earn cash back rewards. If you use a credit card that gives you 3 percent cash back without fees, you can start saving for your next trip with your spending on this trip.

Don’t forget to take out cash abroad for tips.

Before visiting a foreign country, research their tipping culture. If you travel to a country where tipping is important, you need cash.

On my recent trip to Europe, I took advantage of walking tours in each city. At the end of the tour, the guides encouraged us to tip. I agreed. I got terrific tours from spectacular guides who deserved a few euros, so I needed cash for that.

Head to an ATM to get cash for the tips you’ll need during your vacation, but don’t forget about ATM fees . If you have an Alliant checking account, you can receive up to $20 per month in ATM fee rebates, including foreign ATM fees.  If you don’t have Alliant checking, withdraw money from an ATM once during your trip to avoid racking up multiple ATM fees.

Finally, avoid exchanging money for cash. You’ll spend a ton on fees, and the exchange rate at a booth won’t be in your favor. This is especially true at airports, train stations and near attractions.

Spend your vacation savings on your vacation instead of fees. Make the most of your vacation with a convenient card and zero foreign transaction fees. Since you will be using a credit card abroad, consider reading five tips for traveling abroad using credit and debit cards. Happy traveling!


Kathryn Pins is a marketing content specialist at Alliant. She’s passionate about finding and communicating meaningful financial information with Money Mentor readers. Kathryn is a saver who gets more excited about certificates and her Roth IRA than shopping. When she does spend her earnings, it’s on furthering her education, travel, unique experiences, and loved ones.