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Quick Money Tips for Travelers

travel tips

Sometimes we label ourselves as tourists without even knowing it. Whether it’s your face buried in a map or your trendy NorthFace backpack (akin to an American flag in some countries), it’s easy to get targeted by local pickpockets.

But these days, protecting your money when on vacation takes more than just wearing a discreetly (and often awkwardly) hidden money belt.  With all the sneaky exchange and foreign transaction fees charged every time you swipe, theives don’t even have to reach into your pocket anymore; you’re be practically handing your cash over.

With a little foresight, you could avoid getting cheated and get the most out of your dollar. Here are a few tips to help you protect your wallet when on the go.

Paper, Plastic or Both?

It’s good to have multiple methods of payment because it’s difficult to anticipate which will be accepted, and where. Try not to carry more than $300 cash in the local currency, and make sure to get at least some foreign currency before you hop on the plane—banks could be closed when you arrive at your destination, ATMs could be down, and pickpockets frequent currency exchange booths.

In addition to cash, you should also consider bringing more than one credit or debit card on your trip. Carry one card with you at all times and keep one in the safe at your hotel, so you’ll always have a money source in case of an emergency.

If you’re planning an extended visit abroad, consider getting a more traveler-friendly credit card. You can get the most out of your money by earning rewards tailored to your specific needs. You could rack up airline miles, earn extra rewards points at participating hotels and resorts, and can even get cash back. The Capital One Venture Rewards card, for example, is a fantastic international credit card that allows you to redeem miles on any travel expense and doesn’t charge a foreign transaction fee.

Traveler’s Checks

Traveler’s checks (or “cheques” for our British buddies) aren’t accepted at as many businesses, and often come with fees attached. These are slowly becoming outdated, but they’re still a useful supplement to debit and credit cards.

Make sure you get the checks from a trusted issuer like American Express or Visa. Dual signature checks, like the AmEx “Cheques for Two,” are a good option if you travel with a buddy. Allowing access to more than one person is important in case of an emergency.

They’re especially useful because issuers will usually reimburse you for a lost or stolen check within 24 hours, but don’t take that as an invitation to be reckless. Also, they could save you in the event that an ATM network is down or an ATM machine is only available in a foreign language. Traveler’s checks are good for emergencies, but not so much for primary use.

Contact your bank

When planning a trip, there are a number of reasons to contact your bank beforehand. First, you should inform your bank that you’re going on a trip to avoid your account being frozen due to “suspicious activity.” Also, ask your bank about their foreign transaction fee rates. It’s usually around 3% but can vary depending on your particular credit card. This information is very important when calculating exchange rates, which we’ll discuss in a bit.

Avoid Prepaid Debit Cards

Many people think they could cut their losses in the event of a robbery by having a prepaid debit card. The truth is, you should be more wary of your card issuer than pickpockets when it comes to prepaid debit. With the various reloading, withdrawal, and balance inquiry fees, just to name a few, you might as well be giving your money away. Plus, if you lose the card, it could be particularly difficult to replace while abroad. Oh, and there’s a fee for that too.

Beware of the DCC

The Dynamic Currency Conversion process (DCC) is a feature only offered by Visa and MasterCard, and is often where travelers lose the most money. In this process, cardholders have their transaction converted into local currency, with the rate exchange disclosed at point of sale rather than at the end of the billing cycle.

The catch is that the merchant, not your card issuer, calculates the exchange rate. Some merchants have been known to hike up exchange rates up to 3% more than issuing banks, and they can even charge a conversion fee. Reports say that RyanAir has been known to charge up to 7% extra on their transactions.

When signing your receipt, you’ll have the option of being charged in foreign or your home currency. Make sure to check the totals and decide whether you are getting a better exchange or if you should just stick with your bank’s rates.

Angie Picardo is a staff writer for NerdWallet, a credit card website helping people find the best in international credit cards.

Photo Credit: Dene’ Miles

If I Had A Million Dollars…

million dollars what to do

What would I do with a million dollar windfall?  While reviewing some blogs from the Yakezie network, I saw a question posed by Sandy from Yes I Am Cheap for a personal finance meme last week.

I found this to be a fun exercise and conversation for my husband and I. It gave us an opportunity to define what some of our goals are. I decided to join in and come up with a plan should a get a million dollars (after taxes).

Pay off Debts ($130,000)

Between our student loan and our mortgage balance, we have debt total of $130,000. The first part of our spending will be cleaning our slate and taking care of our financial obligations.

By not having debts in our budget, that frees up about $1,100/month. We can use that for other goals, like travel or exploring hobbies. Believe it or not, we won’t quit our jobs just yet – we love what we do. If anything, we’d try to adjust work location.

Long Term Income Stream ($400,000)

We’d take our time in deciding how we’ll use this money. We would hold off for a few months and speak with some financial advisers about viable options. I have a few ideas, but before committing the money, we’d have to sit down and work out a plan together. We both want the other to feel comfortable with how the money is invested for our family’s future.

I’m thinking of something along the lines of getting a rental property (a building with 4 apartments for example).

Take Care of My Family ($270,000)

I personally would not feel good if I didn’t help out my loved ones. First, I would top off my mother’s retirement accounts and finish paying off her small mortgage balance. My husband would want to finish off his parents’ mortgage as well.

For our siblings, we’d create a small family fund to help them as a safety net should they have an emergency. It’ll be set up as a no interest loan, so if they pay it back there’s money for any future crisis. If they spend it though, then it’s gone. We would keep tabs to make sure one person doesn’t clean out the pot.

Our hope is that siblings can create their own income streams to support their dreams. It’s our hope that once that occurs, we can transfer over that money into our charity fund.

Set Up a Charity Fund ($200,000)

I want to help others, but I feel like passing out lump sums would go too quickly and wouldn’t do much. I would set aside money to set up a charity to pass out a small amount of money perpetually.

This would be another area where we would work with a financial and legal professional to get this off the ground. We like to this project to continue for years down the line.

What Would You Do With a Million Dollars?

What about you? If you had a million dollars, how would use it? What would be the biggest challenge? What would be the most fun?

Sunday Morning Routine

relax on sundays

One of my favorite things to do on Sunday mornings is to catch up on books and articles. I watch some shows to check out the news and discuss current events with my husband. It’s one way for me to relax and recharge. My husband go out in the afternoon for worship and fun with friends.

How about you guys? What are favorite things to do on Sundays?

Today is definitely a laid back day, so this week’s links and review is shorter than normal.

Personal Finance Posts to Catch Up On

If you have some free time this weekend and want some tips and information for your finances, be sure to read some of these wonderful posts. There are some handy tips this week to help you out.

I hope you enjoy reading them as much as I did. I also recommend checking out my blogroll to pick up some great personal finance blogs to follow. Please also let me know what are some of your favorite blogs that you enjoy reading on a regular basis.

Have fun this weekend with your family!

Photo Credit: twicepix

3 Ways to Tour Cities for Free

city tour for free

When you’re in a new city a tour is a great way to visit the must-sees and orient yourself to an unknown environment. But hiring guides or taking bus tours can get quite pricey. Here are three ways to tour for free in cities around the world.

Walking Tours

Last year in the New Orleans Garden District, I was able to identify which home belonged to the Mannings of NFL fame versus John Goodman from Roseanne. My skill was not from being psychic or researching real estate records.

Instead I had printed a walking tour which listed 20 stops in this part of town along with pertinent background. My favorite source is Frommer’s which does include self-guided tours for many U.S. and foreign cities.

Google.com offers city tours. Just enter your starting location and a route will be created. Features include the ability to add or remove sights.

Audio Tours

Audio tours are narrated city routes. There are lots of free offerings for European cities but you can find downloadable tours out there for most major American cities.

Some even offer iTunes downloads for your iPod or iPhone. Others are good for any MP3 player or smartphone. Speaking of which, there are free or low-cost apps featuring audio tours for many cities in the App store or Market.

Guided Tours

No-cost guided walking tours are available all over North America and Europe. These can be sponsored by historical organizations, government agencies or just residents who want to share their city with visitors.

For example, the San Francisco city guides offer dozens of tours throughout the week ranging from the Ferry Building to the Golden Gate Bridge and just about everywhere else you’d want to go.

Citizens in other countries often serve as goodwill guides providing free tours. It gives them an opportunity to practice their English and meet new people. My understanding is that paying any meal or entrance fees for the goodwill guide is customary.

Taking advantage of these types of tours will leave you wallet fuller and leave you more knowledgeable than the alternatives.

Have you taken advantage of any of these types of tours? How do you tour cities at no to low cost?

Photo: Some rights reserved by Dylan Passmore

Are You Staying with Netflix?

netflix subscription changes

Change to Netflix Subscription Plans

Netflix has been in the news lately because they are increasing their subscriptions. This week we received an email from Netflix about how the plan will affect us.

Here’s how the email from them described the changes:

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

Your current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming) for $7.99 a month

Your price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). You don’t need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

These prices will start for charges on or after September 1, 2011.

That means that our monthly bill will go up more than 50%. We’re so annoyed that another bill is going up. Before jumping ship, though, we wanted to examine how we use Netflix.

Our Netflix History

Netflix is a very popular choice for people who are looking for cable alternatives. We received a Netflix trial a few months back and fell in love with the service. The trial gave us 2 DVDs at a time with unlimited streaming. Once it was over we went ahead and switched it to 1 DVD and unlimited streaming. We use the PS3 and my laptop to watch our movies and I have to say the service has been great.

Unlike Hulu, Netflix doesn’t include ads on their streaming videos. The DVDs do have some ads, but you can just get your food ready while they run. While I don’t consider it a huge disadvantage, some of the movies and shows I want to watch on Netflix aren’t available streaming.

Keeping Netflix, But Changing Plans

After chatting with my husband, I think starting September, we’ll go to streaming only for our Netflix service and see how that works out.  Like I mentioned, I really wish they have more options for streaming. We use the 1 DVD at a time to fill in the gaps in streaming shows and movies.

How about you? If you’re currently a Netflix member, are you going to keep the DVDs and the streaming or will you choose one service?

Photo Credit: Marit & Toomas Hinnosaar