Whether you are studying abroad or planning a vacation, a multi-currency card can be a great tool to save money. But there are some things you need to keep in mind.
For instance, currency conversion fees and ATM withdrawal charges can add up quickly when you are traveling abroad. You may also find that some cards come with a fee for switching currencies, so it’s worth reading the terms and conditions carefully to avoid hidden costs.
1. Always choose the local currency
One of the easiest ways to save money with the help of a multi-currency card is by always choosing the local currency. This simple travel tip can save you up to $100’s when you are abroad, so you should make it your first priority.
When shopping in a store or restaurant abroad, you will probably be asked to pay in either pounds or the local currency (e.g. euro or dollars). However, it is important to always choose the local currency as it can help you avoid unnecessary currency conversions at unfavourable rates.
This is usually done through a business practice known as dynamic currency conversion (DCC). In addition to the local currency, you should also choose the home currency whenever possible because you will receive much better exchange rates with your multi-currency card.
2. Avoid unnecessary currency conversions
Using a multi-currency card to save money is an easy way to avoid unnecessary currency conversions. It’s also a smart way to manage your cash flow when you travel abroad.
One of the best ways to avoid unnecessary currency conversions is to use a multi-currency credit card that doesn’t charge foreign transaction fees. This will help you minimize your expenses when shopping overseas, whether in person or online.
However, there’s one thing that you should be aware of: Dynamic Currency Conversion (DCC).
When you pay with your credit card in a foreign country, a merchant may ask if you would like to convert the transaction from local currency to US dollars. This is a clever way for overseas businesses to get around their foreign transaction fees, but it’s not something you should trust.
Instead, choose a credit card with a no-fee foreign transaction fee and be sure to check out the exchange rate when making your purchases. This can help you save a lot of money.
3. Check the exchange rate
An exchange rate is the value of your currency in relation to another. It can be an important way to determine whether you can buy more of something in a foreign country.
While some currencies change constantly, others use a fixed exchange rate system. Some governments are able to control exchange rates through policy and regulations, while other currencies only fluctuate due to market forces.
Check the exchange rate on your bank’s website or with a trusted currency conversion app. This will give you a rough idea of what your foreign purchase will cost without being charged any extra fees.
You can also use a multi-currency card to save money while traveling. However, make sure you read your credit card terms and conditions before using it abroad. There may be hidden charges, like cash withdrawals and currency exchange transaction fees, that can add up quickly.
4. Don’t succumb to instant gratification
The ability to resist instant gratification is an important skill for making smart financial decisions. It can help you reach your long-term goals and avoid debt.
While we are hard-wired to prefer instant gratification, it isn’t always the best option. Studies show that people who are able to delay gratification often have healthier lives.
They get better sleep, make healthier eating choices, and exercise more regularly. They also report lower levels of stress and anxiety.
While overcoming the urge to succumb to instant gratification isn’t an easy task, it can be done. You just need to put in some effort. Try to set yourself some realistic, attainable goals that you’re willing to work for.