How To Spend Your Money When You're Traveling Abroad

One of our more prolific subscribers has some useful tips

Olaf Ransome

is a rather prolific subscriber to the newsletter.

He lives in Switzerland with plans to semi-retire in South Africa. If you read the comments section of these posts, you might know this.

You can find Olaf on LinkedIn where he riffs on—broadly speaking—digital finance. He knows his stuff. So, when Olaf decided to send me an email the other day, I not only read it, but asked if I could publish it. Because it provides useful tips about foreign currency issues that could matter to you if you travel or (intend to) live abroad.

Here’s the email very lightly edited—

• Paying by credit card in foreign places

Lots of the time, the machine you have to tap your card against or insert it in will ask if you want to pay in the local currency or your home currency. This is a game played by the companies involved; say your are in Paris, where you spend Euros and you use a US Dollar card from JPM Chase, JPM does the FX (foreign exchange) and makes a buck or two. If you select USD on that Paris terminal, a local bank makes the buck or two on the FX. Jamie Dimon and his minions are now out of pocket, but then they make it up by charging you the card holder an extra fee for doing this strange thing. Now I cannot say this happens everywhere but as best I can tell, it is the norm. 

So my rule of thumb when travelling and using the card: always, always pay in local currency.

• Paying by credit card for for big things

When you pay by card, the card provider or issuer becomes a party to the contract. A few years back, my wife and I used our Swiss MasterCard issued by Corner Bank to make an upfront payment to a tour operator for a music safari in South Africa. Covid got in the way, as did some other issues and then the tour operator went bust.

We were able to claim a refund from the card issuer. But only up to two years back. This is certainly possible in US, UK and CH. As far as I know though only with credit cards and not debit cards. Now if you pay in Euro for a meal in Valencia with your Revolut or Wise cards in Valencia, you don't need the protection I mentioned. 

So my rule of thumb when paying up front for expensive things is to use a credit card. 

• Using foreign currencies on Wise / Revolut 

If you travel outside of your home country and will need to pay in another currency, the best thing you can do is use the feature which allows you to hold balances in other currencies and exchange your home currency for the foreign currency before spending it.

If, for example, I go to South Africa, I load my Revolut account with Swiss Francs aka CHF. I then use the Revolut app to exchange those CHF for Rand aka ZAR, the local currency in South Africa. When I tap to pay in South Africa I am spending local currency. No fees: if I spend ZAR 700 on lunch, that is what I am charged. No fees. Now if I don't have ZAR, the charge will be in CHF and then we are back to those high FX fees.

So my rule of thumb when travelling: use a card to pay for local expenses in local currencies and pro-actively do the exchange. But be careful about timing ...

• FX, foreign exchange on the weekend 

Many of the foundations of things Financial Services do not work 24 x 7. A key part related to your travels is the world of FX, foreign exchange. Revolut offers card holders the ability to hold balances in multiple currencies and to do FX any time. But at weekends, FX markets are not open, or not properly open. So Revolut has to do some guesswork to serve its customers. Net result is that the FX rate is simply not good. 

So my rule of thumb when travelling: on Friday make sure you have enough local currency on your Revolut / Wise card.

• Book round trip from new home

The pricing of goods in foreign countries will often differ from the pricing of the same goods in the home country. It is more expensive to book a flight Zurich to Cape Town to Zurich than Cape Town to Zurich to Cape Town. Now some countries, when you travel in on a tourist visa, might ask to see an onward flight. But, if you are moving and have the right visa there is likely no requirement.

So my rule of thumb when travelling: do the research to see if buying flights locally is cheaper.

• In an emergency cash is king

I used to travel a lot. I would just assume that either there would be an ATM in the arrivals hall or once a car service had collected me and brought me to the hotel, I could go and find one. Now, while I don't remember that failing me, we have seen lots of IT outages lately. Some cash is a good thing.

So my rule of thumb when travelling: have the equivalent of $100 in 20s

Not only good, but great stuff from Olaf.

If you’re looking to open a Wise account, do it though this link. We’ll both get something out of the deal.

And if you missed my most recent posts, check them out. They’re all about the official start—the document collection phase—of our visa application process to move to Spain.

We Just Hit Our First Visa-Related Snag

Success! Step-By-Step On The Road To Spain

I have estimated the costs of moving. At the moment, we’re awaiting either receipt of or apostilles for three key documents. Then, we send them off for translation. As it happens, I’ll update exact costs so you have a more precise idea of what to expect.

We leave in less than five months. On January 2nd.

I’ll update every part of the entire experience of moving abroad.

Practical. Logistical. Financial. Emotional.

And continue with the same once Spain becomes our home in 2025 and beyond.

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Earlier this week, we saw one of my favorite bands—The Gaslight Anthem—In Los Angeles.

The highlight was a pretty good show, Brian Fallon’s (the lead singer’s) incredible voice/writing and my first time at the fantastic Greek Theatre. What a great venue.

The lowlight was spending $51 for two beers. I wrote about it on Medium!

And they didn’t play one of my favorite songs, High Lonesome—

“And Maria came from Nashville with a suitcase in her hand
I always kinda sorta wished I looked like Elvis
And in my head there's all these classic cars and outlaw cowboy bands
I always kinda sorta wished I was someone else

There was ‘Southern Accents’ on the radio as I drove home
And at night I wake up with the sheets soaking wet
It's a pretty good song, baby you know the rest
Baby, you know the rest”