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Traveling abroad requires planning at home to avoid unexpected fees on credit card and cell phone bills

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My big trip this year is a 10-day Italian vacation. I’m excited, but I’m also doing a lot of planning beyond where to get the best pizza and what shoes to bring.

I’m making sure that I spend as little as possible on foreign transaction fees, current exchanges, and smartphone use so I’m not hit with any surprise charges once I’m back in the U.S.

Here’s what I’m doing before I go to make sure there are no nasty surprises when I get home.

Credit Cards

You want to bring a card that has no foreign transaction fees. Otherwise, you’ll be paying an extra 3% on everything you charge.

Fortunately, there’s lot of these cards are available.

If you already have a Capitol One card, you’re set — they’re foreign transaction fee free across the board. Most hotel and airline rewards cards are the same way.

If you’re signing up for a card just because it doesn’t charge those fees, make sure it also doesn’t also have an annual membership fee, or that you cancel it before the fee kicks in (most waive the fee for the first year), or that the fee is worth it.

I’m bringing my Chase Sapphire Preferred card with me as my main credit card (with a Bank of America card as a backup).

This Chase card has a $95 annual fee. I said before I was going to cancel it, but after booking a car rental through their travel site for $250 less than any other offer I found, I kept it in my roster of cards and reap its travel rewards.

One additional thing I did before I left: I called Chase and asked for an EMV chip-enabled card.

All Chase Sapphire Preferred cards now have chips, but I got my card before they made that change. EVM stands for Europay, MasterCard, Visa. This system is standard in other parts of the world, including Europe, and they read the information on the chip instead of the magnetic swipe.

Do you need a chip card? Not necessarily, but cards without a chip can be rejected sometimes in places where you won’t be paying to a person (think: buying a train ticket from a machine).

If you’re choosing between a couple of cards that have no fees, you can look at two other factors: Which one’s going to give you the best travel rewards, and who has the lower currency transaction rate.

Also, call your credit and debit cards’ banks before you go to let them know you’ll be traveling. Otherwise, they could put a hold on your card for suspected fraud.
That happened to my mother while she was in Costa Rica.

Fortunately, her bank called her home phone number and I picked up. I was able to contact her and let her know to call her bank. But all of that can be avoided with giving your banks a heads up before you go.

Cash and Debit Cards

I purchased a couple hundred Euros through AAA so I’ll have cash in hand once we land.

I started by calling a nearby AAA office where I could buy a $100 or $200 CashPax of Euros. The exchange rate is determined when the currency is bundled and I was quoted 64 Euros for $100, or 1.5625 dollars per Euro.

Then I went online, where AAA charges the current daily exchange rate. There’s a $250 minimum plus a $10 shipping fee – $12 for next day delivery – although that charge is waived if you convert more than $1,000.

I wound up spending $410.55 (not counting shipping) for 270 Euros, or $1.5205 dollars per Euro.

Since I fully expect to need more cash than that I expect to refill my billfold with my Wells Fargo debit card.

If I use that card to buy anything directly, which I don’t plan on doing, Wells charges a 3% fee.

But I can withdraw up to $310 per day through a shared network ATM for only $5 per transaction. (If I go out-of-network, I may be charged an additional fee by that ATM’s owner).

The conversation rate changes every day, but when I wrote this story, it was $1.4546 dollars per Euro, or a slightly better deal than what AAA offered.

The last thing you want to do is exchange money at the airport. They offer the worst fees because you’re a captive audience.

Smartphone

Even though I’m a smartphone addict there are two reasons I don’t plan on using it much in Italy.

First, I didn’t have one the last time I traveled to Italy in 2008, so I know I don’t need one to have a great trip. And using a smartphone overseas can be extremely expensive.

If I just showed up in Italy and started using my iPhone without any preparation, AT&T would charge me $19.97 for every megabyte of data.

Since one webpage requires about one megabyte and one minute of streaming video takes up two megabytes you can see how unsuspecting tourists can run up hundreds, even thousands, of dollars in unexpected phone bills.

That’s why I signed up for AT&T’s Data Global Add-On. For $30 a month I’m allowed to download 120 megabytes of data outside the United States. If I go over that I’ll be charged another $30 for an additional 120 megabytes.

Bottom line: I’ll be paying 25 cents per megabyte, not $20.

Then there’s the cost of texting, something I’ll need to keep in touch with my traveling companion and keep up with friends and family back home.

If I went to Italy without planning ahead, I’d be charged 50 cents per text.

But by adding the Global Messaging package at $10 per month my first 50 messages will be free and I’ll only pay 40 cents for each additional text.

There are more expensive plans that include more data and texts, but I’m comfortable with those choices.

I’ll only use the phone to reach my friend if we’re separated and I have a paper map — yes really! — and separate camera.

If I need Wi-Fi, I’ll hop on to the hotel’s Wi-Fi through my iPad when I’m back in my room, or take the iPad to café with Wi-Fi, which are common.

Many cities have free Wi-Fi networks, but those are subject to scammers trying to hack into your device to collect your data, so I’m going to pass on that (and Rome is not one of those cities).

If you’re not sure what you’ll use, AT&T has a nifty Estimate My Usage tool.

Just make sure you cancel those globe-hopping plans as soon as you return home so you don’t get dinged for a second month of fees.

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