Holidays and finances: what to consider

Have you already booked your holidays this year? You might be travelling to a country in the Eurozone, or dealing with currency conversions, but either way, we have a few tips for managing your finances on holidays to make sure you don’t spend money unnecessarily while away.

What to take with you

If you are travelling within Europe, it will usually be enough to take your regular debit card with you in order to withdraw money or pay for your holiday purchases. You should bring a credit card with you if you are travelling outside of Europe, and particularly if you are planning to make hotel reservations or rent a car. Make sure it can be used world-wide.

In principle, you can rent a car or reserve a hotel room using a debit card. However, not every debit card can be used to pay a deposit in the same way a classic charge card can. It all depends on whether or not the vendor accepts the card in question. If you want to be sure your card will be accepted, it’s best to ask in advance.

One important thing to remember is that if a vendor accepts your debit card for a reservation, you will be unable to access the money reserved for the car or the hotel until you have paid the final invoice. It’s therefore important to make sure you have enough money in your account.

Write down numbers for freezing your card

It is also important to write down the numbers that you will need to call to freeze your card in the event of an emergency, such as if you have lost it or if it has been stolen. If you sometimes pay with your smartphone, meaning that you have saved a digital card in an app, remember to also freeze this card if you no longer have access to it. Many credit institutions have specific numbers for you to call if you need to freeze your card, which can be found on their websites. There is also a national number to call to freeze your cards in Germany, which can be reached 24/7 from abroad. Simply call +49 116 116.

Check debit and credit card limits for overseas purchases

Avoid nasty surprises at your destination by checking, before you leave, whether your debit or credit card is subject to a limit on foreign transactions. If you don’t, you might not be able to withdraw money from an ATM or pay with your card. For security reasons, many banks set the limit on foreign transactions to 0 EUR, in order to prevent fraud. However, you can change this yourself in your online banking portal, or ask the bank to help you. Important: increasing your foreign transaction limit doesn’t just apply to physical cards; you might have to do the same thing for the digital card saved in your phone if you plan to pay with it while on holidays.

Withdrawing money is often cheaper than exchanging it

As a general rule, it’s cheaper to withdraw foreign currency directly from an ATM in your destination country. You can usually find an ATM at the airport, and withdrawing money this way is usually cheaper than exchanging it at a currency exchange office. However, if you do want to exchange currency before you go, make sure that you do so at an official currency exchange or bank. Unofficial traders often charge excessive exchange rates. That means you get less foreign currency for your money.

Of course, the cost of withdrawing money at an ATM varies depending on the type of credit card or debit card you have, as well as on your bank. So it’s a good idea to inquire about the conditions for withdrawing money abroad before you go.

Most banks charge you for withdrawing money per transaction, so it’s more expensive if you withdraw small amounts multiple times. On the other hand, you may not be able to withdraw large amounts, as many foreign ATM operators limit how much you can withdraw per day. Single transactions are often limited to 250 or 300 EUR, regardless of what the limit on your card is.

In some cases, you might find special account or credit card offers that allow you to withdraw money while on holiday without incurring any charges. Some banks even have branches or partner-banks in other countries, allowing their customers to withdraw money for free at those banks while on holidays. Here, too, if you do your research in advance and compare various offers, you can save money. Your bank’s list of prices and services (Preis- und Leistungsverzeichnis) will list any fees you will incur for using your card in a different country.

Always view amounts in the local currency

If you want to withdraw money or make payments outside the Eurozone, you should always choose to view the amount in the local currency. Never ask for the amount to be displayed or converted to euros. This is because if you view the local currency amounts, the exchange rate will be calculated by your own bank, not the ATM operator. ATM operators charge additional fees for this service.

Currency converters

Outside the Eurozone, currency converters make it easier for you to understand how much you are spending. The Association of German Banks has a currency converter that can be used to view up-to-date exchange rates for more than 160 currencies.

You can download the most important numbers for freezing your cards here: SOS-Infopass.