4 Secrets For The Most Cost Efficient Way To Travel
It is important to know your finances when you travel. Very often, you would lose a decent amount of money from "hidden costs".
So what is the most cost efficient way to travel?
Drawing from the experiences of both Andy and Alex, here are 4 tips to get the most out of your money when you travel.
If you are about to travel to a destination that uses a different currency, you would obviously need to exchange money.
What is the best way? And where should you do it? At home or when you get there?
This tip is extremely important and may end up saving you 5% if not more!
First, you do need to exchange some money at home. But only a small amount. This is just backup, to get you through a day at most. A few hundred dollars should do it. Do not, exchange anymore than that. If you check with FOREX, you will notice a difference of anywhere between 7% - 20%, between what they buy for and what they sell for. This is what they call a "spread" (i.e the difference between what they buy the currency for and what they sell it for).
Neither should you make an exchange at a local teller once you arrive at your destination. That would be even worse.
Your Visa and Mastercard are your best friends when you travel. So this is one of those situations when they really shine.
Solution: Make an ATM withdrawal once you arrive. Depending on your bank, the common charges are between 1%-3% - but it's really rare to see it above 2% - and a flat fee of a couple of dollars.
So overall if you're looking to spend $5000 at the destination. You're looking at savings of $200-$850.
Always carry two cards with you that are preferably from different banks. Things can happen. A card may not work, or they may fall prey to pickpockets.
For that reason, never carry both cards on you at the same time. To avoid losing them both.
2. The Withdrawal Limit Trick
There is always a withdrawal limit on cards. This can pose a problem, and get in the way of your holiday spending.
Here's the trick to get pass that limitation. Get a cash advance.
Go to the local bank at your vacation destination and ask for a cash advance. A cash advance is a short-term loan that you are able to take against your credit card, in the form of cash.
However, this is one of those rare times that it wont cost you interest.
What it does: When you make a withdrawal, the bank will think you are making a purchase. As a bonus this will save you quite a bit on fees, as most banks will charge $2-$5 per-withdrawal. During the course of a one week vacation. These fees will normally rack up fast.
3. Always Choose The Local Currency
There will be times, that you will be asked to pay in the local currency or your domestic currency. At a restaurant for example.
Here's the tip: Always choose the local currency.
Why?: If you use your card and pay for your purchase in your domestic currency, you will incur a more unfavorable currency exchange rate. The reason being, the banks at home want to make some money off you.
Just imagine you pick the local currency over the course of one week for a family of 4. It's not hard to see how you can save hundreds of dollars, just with this simple tip.
4. Travel Cards
This tip comes from our very own Marketer, Olwen. She has one of these and finds them very useful.
Prepaid travel cards are becoming increasingly popular, and replacing the well-known travel check.
Many frequent flyer programs also have cards like these, where they allow you to earn points that can be used for ticket upgrades or other purchases. In addition to that you can lock in the exchange rates of the day. And benefit from knowing the exact rate that you exchanged your money for.
Know of any useful travel tips? Share with us in the comments below.