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 (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 These are slowly becoming outdated, but they’re still a useful supplement to debit and credit cards.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.