Avoid These Costly Travel Mistakes
More people say they would like more travel in their lives. However, a sure-fire way to travel less is by spending too much on your first excursions! Being travel and money savvy from the start will help ensure you can take the next trip, and another one after that. Here are eight common travel mistakes that could cost you a chunk of change:
Booking anything without shopping around
The internet provides more free travel review and booking services than you could use in a lifetime; so, if you’re not shopping around to compare deals, you’re spending too much. A great time to start reading up on travel locations and options is when you first feel that tickle from the travel bug. More time to search out competitive rates without the pressure of a ticking clock means more money saved.
Aim to compare prices on at least three booking platforms. Popular options are Travelocity, Expedia, Google flights, Skyscanner, Priceline, and aggregator Kayak.com. Compare these rates to what you could get booking directly with the airline or hotel to make sure you get the best deal.
Not using travel rewards
If you have good credit and the ability and discipline to pay off credit card balances each month, signing up for a travel reward credit card can be a smart move. Especially if you have over a year to plan and accumulate points. Many airline credit cards offer enough miles for a signup bonus to pay for at least one round-trip flight; hotel cards offer several free nights for signing up. Just make sure you’re accumulating perks and discounts you’ll actually use.
Now, this doesn’t mean you need to sign up for a new credit card with travel rewards. You may already have access to travel rewards or discounts through your current cards, your credit union membership, your employer, or other organizations like AAA or AARP.
Paying foreign transaction fees
of credit cards: check to see if the card(s) you plan to use while traveling abroad or when booking excursions online charges a foreign transaction fee. This fee, which averages three percent, is incurred each time you buy something from a foreign seller. There are plenty of cards out there that don’t charge this fee, but you’ll need to read the fine print to find them.
Paying for dynamic currency conversions
And one more thing about credit cards—if a merchant offers to convert your credit card transaction from the local currency into U.S. dollars, it’s called a dynamic currency conversion (DCC) and it’s an expensive and unnecessary fee for the cardholder.
Merchants will use a conversion rate that is much higher—as much as seven percent—than the going rate you’d receive at a financial institution if you exchanged U.S. cash for local currency. The merchant pockets the difference between the going rate and what they charge.
Travelers may think they can avoid the foreign transaction fee by doing a currency conversion, which makes sense in theory, but in reality, the credit card company will charge the foreign transaction fee in addition to the merchant’s dynamic currency conversion. The credit card company isn’t charging you for the fact that the purchase comes through as a foreign currency; they’re charging you for making a transaction abroad, regardless of currency.
Sticking to the beaten path
If you’re eating or shopping or hailing a cab near a busy tourist attraction, you’re paying too much—as much as 40 percent more than prices a few blocks away! If you feel safe in the area, look off the beaten path for better deals and more authentic food.
Forgoing travel insurance
Travel insurance is a safety net for your wallet. The two major considerations for purchasing travel insurance are financial risk—if your pre-paid and non-refundable expenses are more than you’re willing to lose should your plans change—and medical concerns—if your health insurance wouldn’t cover a health emergency abroad.
Most travel insurance is sold as a comprehensive plan with a variety of coverage, although some companies will allow you to customize a policy. Coverage can include trip cancellation, interruption, and delay; loss of baggage and personal belongings; emergency medical assistance, evacuation, and repatriation; and 24-hour assistance.
Forgetting about a budget
It’s easy to start with a budget and then forget about it when you find more and more things you’d like to do and see. Remember that a realistic budget should allow you to prioritize what will mean the most to you, have some padding for unexpected expenses, and leave you on solid financial ground when you return so you can start saving for the next trip!
Not telling your credit union and credit card companies you’re traveling
It’s important to notify your financial institution and credit card companies when and where you’ll be traveling, so they don’t suspend your debit card or cancel your credit card when they see foreign activity pop up. This also gives you the chance to ask about which ATMs you can use with few to no fees.Go to main navigation