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How to save on overseas travel

By Paula Pant · Bankrate.com
Monday, June 17, 2013
Posted: 2 pm ET

Next week, I fly to France for the first time. While I'm looking forward to the trip, I also know it could become expensive.

However, a few frugal travel tactics can help lower costs. Here are three ways to save a few dollars on an overseas trip.

Use frequent flier miles

Many travel experts advise using frequent flier miles on international flights. That way, you can capitalize on a higher miles-to-money conversion value.

Calculating this conversion is easy. First, hop on Priceline, Orbitz or any other travel aggregation website to find the cost of a ticket. Then, check with your airline to see how many miles you would need to redeem for that same ticket.

Aim for a minimum redemption of 1 cent per mile, but optimally 2 cents per mile or more. For example, if you need to redeem 100,000 miles for a ticket that costs $1,000, you're getting 1 cent per mile. (100,000 x $0.01 = 1,000).

If that same 100,000 miles could buy you a ticket that sells on the open market for $2,000, you'd be redeeming miles at a value of 2 cents per mile (100,000 x $0.02 = 2,000).

While there are exceptions, you're most likely to get a 2-cent-per-mile (or better) redemption rate if you use your miles to buy an overseas ticket, or to fly business class.

Convert money at a bank or ATM

When traveling internationally, you will need to convert U.S. dollars into a foreign currency. Don't make this trade at the airport or at a train station, where you'll typically get the worst exchange rate or pay the highest fees.

Instead, make the exchange inside a bank. Or, use your ATM card to withdraw cash while you're overseas. Many debit card issuers will charge you a foreign-currency fee, generally around 3 percent. However, you'll usually get a better exchange rate and come out ahead overall by using an ATM or bank.

Use a credit card with no foreign fees

Many credit cards waive foreign transaction fees in hopes of attracting consumers who often travel internationally. That means you won't get charged a fee -- typically up to 3 percent on other cards -- for swiping your card in another country.

If you don't travel overseas often, it might not be worth getting an additional credit card. But if you travel frequently or plan on spending a lot, investigate this option.

Paula Pant blogs at AffordAnything.com about building wealth and living life on your own terms. She's traveled to nearly 30 countries, owns five rental units that produce thousands in passive income, and runs her own digital marketing company. Follow Paula on Twitter @AffordAnything.

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