The eight money pitfalls to avoid when traveling abroad

“We are witnessing a critical time for travelers as Kiwis prepare for the big ‘return to travel’. Borders are reopening, normal flight times have resumed and wanderlust has reignited. Yet from the moment you step off the plane, you’re often paying through the nose for convenience,” said Tristan Dakin, New Zealand country manager for Wise (formerly TransferWise).

“But with a little advance planning, you can avoid most travel scams.”

Dakin has provided Newshub with the following eight money pitfalls to avoid when traveling internationally.

Let it be too late to check your passport

If your passport expires in less than a year, you may need to renew it before you travel. There’s nothing worse than booking flights for a foreign holiday before realizing your passport has expired and having to scramble to organize it before you fly.

If you need to apply for a passport, make sure you do so well in advance of your departure date. This allows time in case your application is not accepted the first time. If you need to apply for a passport urgently, please note that the price is doubled and will cost you $382 for a single adult application.

Get the wrong travel insurance

It’s no surprise that travel insurance is more important than ever right now. But travelers should be very careful when reviewing their insurance policy to fully understand the terms and conditions, especially any exclusions that may apply.

Some travel insurance providers offer select coverage for epidemic and pandemic illnesses, including COVID-19, and offer a provision to claim for cancellation and medical expenses should they purchase it after purchasing your policy.

However, it does not cover general travel disruption as a result of COVID-19, including mandatory closures, border restrictions and travel against New Zealand government advice.

There are limitations to travel insurance, but it’s still vitally important to have one before you venture out. Many countries are loosening their quarantine and social distancing rules, which means there is a higher risk of contracting COVID-19 while visiting busy tourist spots.

Buying foreign currency at the airport

No matter where you are in the world, the airport is the worst place to exchange money.

Once you’re in an airport terminal and need to exchange New Zealand dollars for Thai baht or euros for Vietnamese dong, exchange houses know they have little to no competition and will charge you through the roof.

To avoid getting scammed, shop around for the best deals before you go to the airport. Don’t be fooled by “no commission” or “great rates” claims.

Instead, check the currency conversion rate on Google – the further away you are from that number, the worse the deal.

Using your bank card abroad

Using your normal debit or credit card abroad is likely to result in additional charges to your account.

For example, New Zealand banks charge between 1.4 and 3.5 percent for foreign transactions, which means that a $100 purchase will cost between $101 and $104. They also charge a markup on the exchange rate, which means these little charges add up, especially if you pay for everything by card.

There are bank card alternatives that offer better value for money, such as the Wise card. These allow you to spend money in dozens of currencies at the same exchange rate you see on Google, with no hidden surcharges or fees.

Falling for dynamic currency conversion scam

When you buy something abroad in the store or withdraw money through an ATM, you may be presented with the option to pay in the local currency or in your local currency. This is known as “dynamic currency conversion” and is designed to exploit you, not help you.

Paying in New Zealand dollars may seem like a good plan, but it allows the merchant to convert the purchase into the local currency on your behalf, meaning the exchange rate is guaranteed to be much worse compared to your card provider.

In the UK, you may be charged 10 percent per transaction if you choose to pay in your local currency.

The golden rule is to always pay in the local currency of the place where you are.

Transfer money using your bank

Sending money between countries can be expensive if you use your bank. This rings true enough for the countries you send money to and from.

New Zealand banks charge between $13 and $20 for international money transfers. In addition to the high fees, they charge a surcharge and a markup on the exchange rate, which means you won’t get any bang for your buck.

One way to get around these fees is by using online money transfer services, which are faster and cheaper than banks. Search online for a real-time exchange rate comparison tool that shows the fees and exchange rate charged by banks and other money transfer services.

Not checking your mobile roaming rates

Most telecommunications companies charge extra if you use your phone outside of your home country, and the charges can be high if you don’t plan ahead. The cost of outgoing calls can be exorbitant and some also charge for incoming calls. However, the real waste of money is data usage.

Pay-as-you-go data charges while traveling range from 50 cents to $3 per megabyte, but some can be as high as $15. Check rates with your telecommunications company before traveling abroad, or consider purchasing a local SIM card to reduce the risk of exorbitant bills.

Buy excess insurance at the car rental counter

Renting a car can be a convenient way to get around a destination, but pay special attention to additional charges on top of basic costs.

Car rental insurance typically comes with a much higher excess than standard car insurance, up to several thousand dollars. While it pays to have “excess insurance,” which reduces the driver’s liability to zero in the event a car is damaged or stolen, car rental companies charge a fortune for the policies they sell when you pick up the car. car.

You’ll get a better deal if you buy separate coverage before you travel. For example, look for comprehensive travel insurance policies that also include car rental excess insurance.

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