Travel is expensive and sometimes we unknowingly make it more expensive than it has to be. Here are six mistakes we learned along the way that can cost you serious money.
1. Paying for things in US dollars.
When you make purchases abroad — whether it’s a meal or a handbag or souvenirs — you may be asked if you want to pay in USD. Don’t do this. Always pay in the local currency. Why? Because retailers and restaurants generally give you an approximate exchange rate that is worse than the official rate. Your bank will give you the best rate of the day. In 2010, this simple mistake cost me about $100 when the value of the Euro changed significantly.
2. Failing to take advantage of lounges
It’s almost embarrassing — with the amount we travel — that it took us until 2019 to get a credit card that includes a Priority Pass. We were budget travelers until the last few years and assumed that lounges were only available to schmancy first and business class passengers. But with a Priority Pass membership, you can access many lounges around the world regardless of what airline you’re flying and what cabin you’re in. We have two Priority Pass memberships with our credit cards. This saves us money — particularly on a long layover — because food and drinks are generally complimentary at the lounges and the membership is covered by our credit card. It’s also just a way more comfortable way to pass the time in an airport. See more below.
3. Failing to take advantage of travel credit cards
Even if you only fly a few times a year, a travel credit card can provide you with incredible perks to make your trip more comfortable and give you extra points to use for even more travel. We used to be deterred by huge annual fees before we realized that AmEx Platinum ($699 annual fee) includes a ton of statement credits for purchases we already make anyway — and we actually get more credits than the cost of the card. So we get the card essentially for no annual fee and still accumulate a bunch of points and other perks that save us money and have access to additional lounges through the AmEx network.
Still, we highly recommend the Chase Sapphire Reserve as the overall easiest travel credit card to use for the most value. Even though the annual fee is $550, you get an automatic $300 statement credit for travel purchases and can rack up bonus points on a wide variety of travel and dining options. We use points to pay the remaining $250 annual fee, so that means that we don’t pay any cash for this card either, while getting access to Priority Pass lounges and other great benefits.
4. Only searching flight options from your home base to your destination
You may be thinking: “Well, what else would I be looking for?” But take an example that I just found on Google Flights this minute with no real planning involved. Say I wanted to go from Washington, D.C., to Bucharest, Romania to go explore the castles and mysteries of Transylvania and beyond (yes, I have October brain right now 👻 🧛♀️ 🧙🧟♀️)
Here’s what I get if I just plug in DC to Romania:
But here’s what I get if I try to find the cheapest direct flight to Europe and then a separate connection:
That’s an easy savings of $226 per person or $452 per couple. And we’ve seen way bigger savings by booking this way. Important note: Many European budget airlines fly out of smaller airports than the international carriers, so be very careful if you’re booking a same day connection that it’s from the right airport. Sometimes we add a night or two in the first destination and fly Ryanair or EasyJet from a different airport (but that can eat into the savings from booking separate legs).
This strategy can also work on the U.S. side if you’re not located near a large international airport. For example, when we had to fly out of Richmond, Va., we booked a cheap direct flight from Newark to Europe and then booked a separate commuter flight from Richmond to Newark. This knocked off about $200 per person.
5. Paying unnecessary fees for transactions
These “unnecessary” fees can sneak up on you in a few ways. Here’s how you can prepare:
1. Make sure your credit card does not charge foreign transactions fees. Most travel credit cards don’t charge these fees but check to make sure.
2. Don’t use a currency exchange service at the airport unless you absolutely have to for some reason. They charge ridiculously high fees.
3. It’s almost always better to use an ATM in town—or skip cash altogether if possible (Norway even took credit cards for public restrooms). We have been to places in the world where cash is necessary but ATM access is limited, the machines are rickety and freeze up, they are out of money, or they charge insane fees. Do some research before you leave home—you will likely find a wealth of info on how to safely get cash in your destination.
4. Once in a while, we get foreign currency from our bank before we leave—but that comes with a fee, too. Still, it might be worth it for the convenience. So sometimes it’s just a matter of weighing the options, but you can be prepared to make the best choice with a little research. We use the XE app to check the daily rates and compare available options.
6. Failing to research tipping culture in your destination
This is going to be controversial. Even the two of us disagree on how to approach tipping internationally. I know many Americans who leave 20% everywhere in the world because that’s what we do at home. Our own system is so ingrained in us, that we feel morally terrible if we don’t tip at least 20% (and service providers are starting to suggest 25% in the U.S.).
We fail to recognize that other countries don’t operate the same way. I like to research what’s customary and follow the local practices. Think about it this way: In some countries that are very expensive, the cost of wages and taxes are included in the advertised price. In the U.S., these extra fees of up to 30% in taxes and tip wages are tacked on to the bill at the end.
It’s common for servers in the U.S. to earn $2.35 an hour and rely on tips for their living. This isn’t true everywhere in the world. In some places, servers make a nice living and tipping isn’t a part of the culture — or tipping could range from 5-15%. In other places, leaving your change is customary — but not necessary — to show you were happy with the service. And sometimes, a tip might be insulting, embarrassing or even seen as a bribe. The best thing to do is take a minute to ask a few people from that area. We like to ask our Airbnb host what’s customary and look at various travel forums online.
What do you think?
Do you agree with our tips? How do you approach tipping abroad? What financial mistakes have you made when traveling internationally? Did we mention anything you didn’t know about already or is this all old news? Let us know in the comments.
One response to “6 Biggest Travel Mistakes that Cost You Money”
I agree on all of it. Regards to tipping… as you know, in France it’s not customary to tip extra unless the service is exceptional… I did have a situation however where I tried to tip at Mr. man‘s restaurant… he chased me down to give me my money back. But then the server was apparently “talking s***” about me for not tipping. I’m like first of all I tried to tip. Second of all, why would they be talking about me if it’s not customary? Lol