Most people who draw up a travel budget before travelling include only a few major expenses in it, such as accommodation, airfare, sightseeing and food.
However, travel – especially foreign travel – can incur a number of other expenses as well, which can eat into the budget and even turn a memorable holiday into a dreadful disaster. This is especially true for individuals who are not travelling for work and, therefore, don’t have the luxury of claiming most expenses as ‘business expenses’.
However, every cloud has a silver lining. Pleasure travellers can avoid or eliminate these expenses, or at least, mitigate their impact on their travel budget. All they need is a little planning and some forethought.
In this article, we have rounded up a list of 10 travel expenses you might not have considered before. We hope the list can help you avoid these expenses and enjoy your trip better.
1. ATM Withdrawal Fees
Depending on the type of cash card you use and the bank it is drawn on, you will incur some fees every time you withdraw money from an ATM in a foreign country. In most countries, withdrawing cash using a credit card incurs higher fees, and is, therefore, a more expensive proposition than using a debit card. Also, in some countries, you may be charged extra for withdrawing cash at the ATM of a bank that is different from the bank that has issued the card.
Can You Avoid It?
Yes. But only to some extent.
If your card is drawn on a bank that is part of the Global ATM Network, you can avoid paying withdrawal fees and thus, enjoy free transactions when you withdraw from that bank’s partner ATMs anywhere in the world. Before you travel, check with your bank if it is part of the global network or not. Remember to ask if there are any location-specific exceptions, i.e. if transactions in some foreign countries are not free, even at partner bank ATMs.
If your bank is not in the network (perhaps none of the banks in your country is), check with your bank if it can offer you a card with low withdrawal fees. Even if this charge is not zero (i.e. free), you will still save a lot of money, especially if you are a frequent traveller and tend to withdraw money from ATMs often.
Also, try to withdraw from bank ATMs and not from independent machines installed in stores or malls. In addition, machines with labels like Travelex, Euronet, Moneybox, Cardpoint or Cashzone charge higher fees and offer poor exchange rates compared to bank ATMs, so avoid using such ATMs to withdraw your money.
Another low-cost option is to avoid using ATMs entirely and send money to yourself using a specialised remittance service like InstaReM. Cheaper than most banks, InstaReM offers guaranteed zero-margin FX rates and best transfer amounts across a number of currencies and countries in Asia, Europe, North America and Oceania.
2. Foreign Transaction Fees
With most credit cards, a transaction fee is payable for all foreign transactions, irrespective of the currency being charged at the point of sale. Through this fee, the credit card company charges you a percentage value of every transaction made abroad. This can add up very quickly if you use your card often.
It is important to note that a foreign transaction fee is also levied on online transactions with foreign merchants and inter-country transactions routed through PayPal or international banks. Even if you are not physically in a foreign country; as long as the transaction is processed ‘internationally’, this fee comes into play, so the following strategies would be useful either way.
Can You Avoid It?
Yes, but like ATM withdrawal fees, again, this depends.
You may be able to avoid paying these fees by doing some research. Find out whether your bank charges for foreign transactions on your credit card and if so, how much. This way, you will be well-prepared before you initiate any such transaction and can control your shopping impulses! Some banks offer fee-free or low-fee cards, which can save you a lot of money in the long run, especially if you travel frequently and shop often.
A word of caution: Your bank may charge a hefty annual fee that may outweigh the advantage of no or low foreign transaction fees. Find out about this before you travel.
You can also check if your bank offers travel or frequent-flyer cards, i.e. credit cards designed specifically for travellers. These cards may not charge a transaction fee and may provide additional benefits such as frequent-flyer miles or credit reward points.
3. Dynamic Currency Conversion Fees For Credit Card Purchases
When travellers think of possible travel expenses, almost no one remembers to add Dynamic Currency Conversion (DCC) fees to their list. Most people don’t even understand what DCC is, so the charges it entails could be a shocker when you receive your credit card bill a few weeks later.
Put simply, DCC is a financial process that allows credit card holders to pay for their foreign purchases in their home currency. At first glance, paying in your own currency may appear to be the obvious, easier choice. After all, this is the currency you are familiar with. Plus, the exchange rate conversion process is pretty straightforward, right?
The amount that you actually pay in your own currency will be higher than what you would pay in the local currency, thanks to currency conversion fees and DCC transaction fees that are tacked on to the final bill. In short, opting for DCC and paying in your own currency can make your foreign purchases more expensive, not less.
Can You Avoid It?
Yes, you can! Just say NO to DCC.
When the merchant asks you if you would like to opt for DCC and pay in your own currency, smile and refuse – you have every right to do so!
If a merchant selects DCC without asking for your permission or despite you opting out of it, ask them to first void the initial transaction and then run it again in the local currency. Never forget to check the bill before you finalise a payment, to make sure that all details are accurate, including the billing currency and amount.
Another old-school option to save on DCC charges: Use cash! If you prefer not to carry too much cash on your person, ask your local bank for a low-fee or no-fee debit card before you travel and use that for purchases.
4. Foreign Currency Exchange Fees
At some point, almost every traveller finds himself needing to exchange his own currency for local currency. Low-fee credit/debit cards notwithstanding, cash is still a necessity in many countries.
By virtue of their location, exchange bureaus within international airports are the most accessible sources of local currency for foreign tourists. However, most such bureaus don’t have the wherewithal to offer good exchange rates. Therefore, every time you exchange money at an airport bureau, you end up losing money.
Can You Avoid It?
Not completely, unless you came armed with enough local cash to last you through your entire holiday. However, you can minimise its impact when you avoid using exchange bureaus at airports unless you absolutely have to. Also, do your research on other exchange bureaus – their reputation is as important as the rates they offer.
In most countries, exchanging your currency through banks or money exchangers is more expensive than going through a specialist foreign exchange firm like InstaReM. This is because banks add a markup to the FX rates they offer to customers plus other hidden charges. With InstaReM, you get mid-market rates without any added margins, low transfer fees and zero hidden charges, so you get the best exchange value for your currency, every time you transfer.
5. Mobile Roaming Fees & Wi-Fi Charges
In almost every corner of the world, mobile phones are becoming ubiquitous. Smart phones with cameras and apps can elevate a travel experience from humdrum to absolutely amazing. However, there is a flipside to using Google Apps, Skype and restaurant review websites on your travels to foreign lands. Roaming and Wi-Fi charges can cost a fortune and hurt your travel budget.
Can You Avoid It?
For the most part, yes. There are a few strategies you can employ to travel with your smartphone without disturbing your travel budget:
i. Turn your data off: This may sound like sacrilege in today’s hyper-connected, social media-crazy world, but it is possible to travel without a phone and have fun anyway. Still, if you don’t want to leave your phone at home or disconnect completely, at least turn the data off, so you won’t be hit by hefty Internet charges on your next bill.
ii. Use free Wi-Fi where available: Many hotels, cafés, museums and city centres offer free Wi-Fi connectivity which you can use to save on mobile data charges. Be circumspect though, as free Wi-Fi connections are rarely secure and may leave you vulnerable to hackers and identity thieves. Use free public Wi-Fi only for non-financial or other non-critical tasks.
You Might Also Want To Read: 10 Tips To Protect Personal Information & Avoid Identity Theft
iii. Download offline maps in Google Maps before you travel: Or use a good old paper map – it works just as well!
iv. Buy and use a local SIM card: This is probably the best thing you can do to save on those pesky roaming charges. Make sure your phone is ‘unlocked’ though, i.e. set up to receive a new SIM card.
v. Check if a customised plan is available for you: If you’re a frequent traveller, your cellular operator may be willing to put you on a customised, low-cost plan.
vi. Don’t be a hostage to your phone: Smartphones are great, but in the absence of Internet connectivity or a reliable cellular network, they are next to useless. Keep hard copies of important travel information and documents (including important phone numbers), so you’re not too badly affected even if your phone doesn’t work.
6. Hidden Hotel Or Resort Charges
In some countries, hotels and resorts tack on additional fees which may not be advertised as part of the room’s nightly rate. For example, they may charge extra for additional pillows, sheets, towels or even room service. Wi-Fi and parking may also not be included in the base rate. These charges may not be illegal per se, but they might be included in the fine print that most people don’t bother to read. This oversight may cause a shock at the time of settling the final bill. Depending on the location, type of hotel and the duration of your stay, these charges could mount up.
Can You Avoid It?
Yes, but it depends on your planning and anticipation.
Before you book a stay at a hotel or resort, ask them upfront about what exactly is included in the room rate and what’s not. If you’re on a tight budget, make a list of these additional items and resolve not to ask for them for it – you don’t really need that second pillow, do you?
7. Airport Departure Tax
Did you know that many countries charge foreign travellers a ‘departure tax’ when they leave that country? This long list of countries includes Australia, Canada, Malaysia, Philippines, Bangladesh and Egypt, among others.
In some countries – Cambodia, Sri Lanka and Thailand, for example – this fee is included in the price of the aeroplane ticket.
In many other countries though, travellers are required to pay a departure fee in cash. These include Brazil, Canada, Iran, Jamaica, Guyana, etc.
Can You Avoid It?
Maybe, it depends on factors that may or may not be in your control.
One cost-saving strategy when you fly is to book direct flights circumventing countries charging a departure tax. Do your research. A good way to check if a country charges a departure fee or tax is to call the country’s local embassy or visit its website. Your travel agent or airline should also be able to tell you whether the price of your ticket includes a departure fee.
If a country charges this tax by cash and you cannot avoid flying through it, make sure you have enough cash to cover the payment. This way, even if you cannot avoid paying the fees, you can still ensure that you don’t have to run from pillar to post exchanging your currency and lose money due to the poor exchange rates offered by airport bureaus. More importantly, ready cash on your person will help you minimise the risk of missing your flight!
8. Airport Parking Fees
Almost all airports charge high parking fees. These amounts vary due to:
- Airport location: Fees are higher in busy airports like London, New York and Sydney.
- Parking location: Fees are higher if the car park is close to the departure terminal.
- Travel season: Fees are higher during peak flying seasons such as Christmas and Easter.
Regardless of these factors, passengers in almost every country find them prohibitive, especially when added up over time.
Can You Avoid It?
Yes, you can.
If possible, don’t drive yourself to the airport. Use public transport or the airport’s shuttle service, if available. You can also take a cab or have a friend drop you off.
If you do want to come in your own car, bring a friend along who can take your car back after you leave. If this is not possible, then you cannot avoid parking fees entirely, but you can minimise its impact by booking a parking slot online. At many airports, online bookings tend to be cheaper than ‘drive-up’ fees. Check if the airport provides this facility.
9. Airport Fines
One of the most common types of fines levied at airports concerns passengers carrying banned or sensitive items in their carry-on baggage. Almost all international airports are finicky about travellers carrying items like scissors, knives, box-cutters and even containers of liquids or gels (shampoos, creams, etc.) in their carry-on bags. Only the extremely lucky can get away with a simple warning. Fines are a more common form of punishment, and the amount usually depends on the type of contraband involved. The worst-case scenario for the passenger would involve criminal referral, with the ‘culprit’ being placed on a government security database – a type of notoriety that is anything but desirable.
Can You Avoid It?
Yes. This one is completely avoidable as long as you do your planning and pay attention to details.
Before you fly, check the airport’s website to confirm what items you are allowed to take in your carry-on luggage. Some liquids are allowed on aeroplanes as long as the containers (bottles, tubes, etc.) meet the specified requirements. Confirm these requirements before packing that hand cream or moisturiser in your handbag.
10. Other Expenses
Some other important expenses that travellers often forget to consider before they travel include:
- Vaccinations, medications and emergency medical expenses
- Travel insurance
- Other unforeseen expenses
You Might Also Want To Read: Do I Really Need To Buy Travel Insurance?
Strategies To Deal With These Expenses
Some countries ask for medical reports as proof that you have been vaccinated against certain diseases before they allow you to enter that country. You may not be able to avoid this expense, but you can buy travel insurance to protect yourself from unforeseen/emergency medical expenses in the foreign country.
Tipping culture varies from country to country. For example, service professionals in the USA such as taxi drivers and wait staff expect to be tipped as a reward for their service. In New Zealand on the other hand, tipping is considered in poor taste at best and insulting at worst. Educate yourself on these differences and plan your budget accordingly.
Even the best planner may be at the mercy of unanticipated events that may lead to unforeseen expenses. Have a strategy ready to deal with such eventualities: hide extra cash in a safe place, create a separate ‘emergency-only’ bank account that can be accessed from anywhere or send money to yourself through InstaReM’s low-cost remittance service.
Also, do include transportation costs in your budget. Even if you plan to use only public transportation or free or cheap airport shuttles, you might have to use expensive taxis at some point, so planning for this eventuality will prevent any disturbances to your budget.