4 Financial Tips When Traveling to Europe

Whether you’re planning a short city break in Paris, a ski trip to the Alps or a dream vacation touring the Mediterranean coast, you want to make sure you’re getting the very best value for money. After all, cutting on unnecessary costs means you have more to spend on those once in a lifetime experiences – and that’s what travel is all about.

This guide covers some handy tips to save money when you visit Europe – cutting credit card costs, eliminating unnecessary currency conversion fees and more. 

1. Using a credit card abroad

Using a card when you travel is convenient and can be much safer than carrying lots of cash for your trip. Here are a few simple ways to make sure that spending and withdrawing cash with your card is stress-free, and doesn’t land you with unexpected bills when you get back home.

Before you travel

Credit card providers have advanced security and anti-fraud tracking. This protects consumers – but it can also mean your card is limited or blocked if spending overseas shows up as an unusual pattern and triggers anti-fraud protocols.

The simple solution is to inform your card provider in advance that you plan to travel. Different card providers have different processes for this – you may simply be able to flag your plans online or using your card app, or you might need to call the customer service desk. While you’re sorting this out, take a moment to check the card company has up to date contact information for you. That way, if there’s a problem while you’re away, they can simply give you a call to sort it out in the shortest possible time.

You may also decide to check and update your credit card limits to make sure you’ll have sufficient funds available while you’re on vacation. 

While you’re in Europe

When you’re spending or making withdrawals abroad, you’ll want to know the exchange rates and fees being applied to your account. Typically you’ll pay a foreign transaction fee – usually shown as a percentage added to the cost of your transaction – as well as a possible markup on the exchange rate used. Some ATMs may also impose their own fees, although these usually show up on screen as you make your withdrawal – so you can cancel if they’re excessive.

Get details of foreign transaction fees from your card’s terms and conditions, and keep track of the exchange rates on the card network’s website. You can also get up to the minute exchange rates, to help you compare the ATM rates available against the mid-market exchange rate for your currency. 

The other card fee to watch out for is dynamic currency conversion – usually shortened to DCC. This is where an ATM or merchant asks you if you’d rather pay in your home currency instead of the local currency wherever you are. This can be an appealing idea as you’ll see immediately what the transaction costs in dollars – but it’s actually more expensive than using the local currency. By agreeing to DCC you’re likely to be hit by higher fees and a poor exchange rate – pushing up costs unnecessarily. Pay in the local currency wherever you are for the best deal.

Have an alternative

You’re on vacation. The last thing you want to think about is things going wrong. However, having a Plan B is always a smart idea.

One common issue is to find your card isn’t accepted where you travel. Maybe a merchant won’t take American Express, or you can’t find an ATM which will take your Discover card. Have an alternative card, on a different network if possible. This can also be your backup if you lose your main card, or find it’s blocked as you travel.

Another option is to take along a travel currency card. The best travel cards available let you top up your funds online when you need to, and make local withdrawals wherever in the world you are. This can be a simple way to manage daily spending – or to have an emergency fund as you tour Europe.

Depending on your card provider, you might also get complimentary insurance while you’re away. Find out what travel insurance options you have with your credit card before you leave the US.

2. Compare exchange rates before buying local currencies

If you’re taking cash to Europe to fund your trip, you’ll want to compare different exchange services to get the best deal. It’s also worth noting that you’ll need to make a declaration if you’re taking large amounts of currency into Europe – usually the benchmark is set at EUR10,000 or equivalent in other currencies. In this case, check out the rules for the country you’re headed to and make your declaration at the airport to avoid any issues.

Don’t forget that although much of Europe uses the euro, there are still many countries where you’ll need different currencies. Planning on a break in London? You’ll need pounds. Going to visit the Game of Thrones filming locations in Dubrovnik? Take kuna. Double check the currencies you need before you change your dollars.

It’s also worth remembering that exchange rates go up and down all the time, based on the global forex markets. This will impact how far your dollar goes when you’re traveling. To make sure you can plan your travel budget properly, you might want to keep up to date with the latest forex news for your currencies before your trip. That way there are no surprises when it comes to time to buy your travel money.

3. Avoid exchanging money at the airport

No matter where you’re headed, you’ll be better off if you avoid exchanging currency at the airport. The same goes for other places like hotel exchange desks and currency services in train stations. In all these locations you have a captive market where people are willing to pay extra for convenience. This means higher costs and – often – a poor exchange rate.

One common trick to look out for is where providers advertise a low headline fee – maybe zero commission, or fee free currency exchange – but then hide their charges in the exchange rate used. This can mean you end up with far less travel money than you would have received from a provider which uses the mid-market exchange rate and charges a fair and transparent fee. Use a reliable online currency converter to get the mid-market exchange rate for your currency – and compare this against the rates on offer from any provider you’re considering. If there’s a difference, it’s probably because a markup has been added to the rate.

If you find yourself low on cash overseas and can’t find a currency exchange using a fair exchange rate, look for an ATM instead. Usually this will net you a better rate, and mean you can get your hands on enough cash to tide you over until you hit a city centre where competition pushes down the cost of currency conversion.

4. Do thorough research about your destinations

If your trip involves multiple destinations don’t forget to research all of them to make sure you get the best possible experience. You’ll find lots of helpful travel planning inspiration online to give you practical hints, tips and ideas. Travel advice websites are also good places to check out any travel providers you’re considering using, to make sure they’re reputable and recommended.

Up to date advice about what’s hot at your destination can be found on travel forums, blogs and websites. These are also great places to look out for news about common scams and pitfalls wherever you’re headed. The sad fact is that fraudsters and petty criminals will often target tourists who look like they’re relaxed, and have turned off their street smarts. By doing some basic research and applying common sense you can make sure you’re safe to enjoy your break in Europe without unnecessary hassle.

Travel is seldom cheap, but it can be a life changing investment. Get the biggest bang for your buck on your trip to Europe with these simple tips, and enjoy your trip!