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Euro-Tip: How to Use Your Credit Card Abroad

Charisse Conanan

Several years after I graduated from college, I looked into the new year with incredible joy because I had planned my first trip overseas. My best friend wanted to visit her Italian roots for her 25th birthday and I could think of no better way to help her celebrate than to accompany her.  We decided to take Rome and Florence by storm. I always wanted to visit the Vatican, Coliseum, the Statue of David, and just walk the streets and eat gelato. As an American Studies major in college, I was infatuated with understanding how other cultures influenced the world. However, there were a few issues — how would we pay for the trip? Would I go broke charging everything on a credit card? The strategies that we used to go to Italy are ones that I still use today, particularly as I get ready to plan for a trip later in 2013.

Set Your Mind on a Financial Target. I first asked myself how much money I would need to travel for a 10-day trip and not owe anyone money when I returned. Whatever the price was in U.S. dollars, I would need 1.5 times the amount to buy things in Euros given the exchange rate at the time. My friend and I decided that we needed about $2,500 each to have the vacation we wanted. Fortunately, we knew the benefits of planning ahead, and we each saved $500 per month since the summer. I had to give up other things like extravagant outings to hit my goal. I booked my flight on my credit card to rack up miles, and then I paid off my bill by the due date with the money I saved up. Because the credit card bill would be much higher than my normal monthly credit card payment, I was extra conscious of other charges that I put on my credit card for the next 30 days.

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Split the Expenses.  My best friend booked the hotel room in Rome on her credit card and I put the room in Florence on my credit card. We did not have to pay each other back for our respective shares because the rooms were roughly the same price. We were able to book our train tickets from Rome to Italy on our respective cards at the same time.

Call Ahead. With lodging and air transportation out of the way, I wanted to have a strategy in place before I arrived in Rome. I called my credit card and debit card companies before I went to let them know that I was going to travel overseas. Otherwise, the companies would have placed a hold on my account because of the “outside” activity. By calling, I also found out that if I used my debit card overseas, I would be charged an additional fee with every transaction for the currency conversion. However, I would not be charged additional transaction fees when I used my credit card. Most financial institutions outline their policies and it’s important to read the fine print.

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Get Currency. I wanted to exchange some dollars for Euros before I arrived. I also wanted to carry U.S. currency with me in case the value of the dollar rose after I got to Italy; I could buy more stuff in Euros with my dollars. I could also buy Euros on my credit card in case I got desperate, but that would mean more money to pay back upon my return.

Treat Yourself. I have one golden rule: If I’m going on vacation, I want to have fun. For me, fun means having enough money to treat myself to things or experiences that I want to have. I told myself that I wanted two quality pieces of Italian leather. I made this a priority — I could sacrifice some wine outings for a chance to get my hands on some fine leather pieces. I was specifically looking for a bag and a pair of Italian leather boots. I got both! Because I used Euros instead of my credit card, I even negotiated a great price for the purchase.

My best friend and I always talk about that Italy trip — we felt grown, independent, and on top of the world. If you want to go away on vacation, set your mind to the task and follow these simple strategies. Life is short — live it up with a strategy in 2013.

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