If you go to one of the popular destinations with a travel agency with which you have paid the so-called all inclusive, and you do not intend to spend any more, you are practically worry-free, at least as far as financing other expenses is concerned. But if, for example, you drive along your own axis, you definitely cannot avoid paying abroad. You should therefore decide how you will pay your expenses before you leave.
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Exchange cash in the Czech Republic
If the goal of your trip is a destination where cashless payment is completely common, there is no need to carry wallets stuffed with banknotes. In the opposite case, i.e. in places where card payment is not so obvious, it is advisable to have a sufficient amount of cash with you. Experts of the Czech Banking Association (ČBA) recommend relying on domestic exchange offices and banks rather than those abroad.
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“It may happen that banks and exchange offices abroad may not accept Czech currency at all. Just like Czech banks and exchange offices, they do not offer all foreign currencies,” pointed out Tomáš Hládek, CBA payment system expert.
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“If you are going to a country whose currency is not offered even by exchange offices here, you need to get dollars or euros, which you can exchange for the local currency on the spot,” he recommended.
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At the same time, it is good to know at least the approximate exchange rate of the given currency against the koruna, find out the currency conditions of the given country, and last but not least, find out what the banknotes and coins in the given country look like, so that the money changers cannot cheat you.
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Can you pay with your card abroad?
“If you plan to pay by card abroad, it is advisable to check whether the required brand of payment card is accepted in the country in question and whether it is common to pay by card at all. There are countries that can reject certain types of cards,” pointed out Hládek.
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As he further recommended, try to withdraw cash abroad only from ATMs that are clearly operated by banks. “Other ATM operators often charge additional fees for their services, which can make cash withdrawals more expensive,” he added.
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Watch out for DCC
Many banks allow their clients to withdraw cash from ATMs for free even abroad. Even so, you need to be careful when choosing, but also when paying cashless in the store. It happens that clients are unpleasantly surprised by an unfavorable exchange rate, which is often caused by the so-called DCC (Dynamic Currency Conversion).
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If the ATM or payment terminal evaluates that the payment card was issued in a different country than where it is currently being used for payment, it can offer two options for withdrawing money, or payments: with conversion or without conversion (with conversion/without conversion), CBA explains.
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If you select “with conversion”, it is clear exactly what the exchange rate will be, but these amounts are often disadvantageous and burdened by the high margin of the local bank. If you choose the “no conversion” option, the current exchange rate offered to the client by his home bank is used. It is not the most advantageous, but it is definitely comparable to a regular tourist exchange office.
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CBA experts also point out that within the EU, operators of ATMs and payment terminals are obliged to inform the client about the exchange rate and what fees will be associated with the payment. Such rules do not apply outside the EU. Many Czech banks already allow their clients to block disadvantageous withdrawals from ATMs abroad directly in mobile or internet banking.
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| The protection of clients during card operations abroad will increase |
| As of July 1, an amendment to the Act on Payment Systems comes into effect, which is intended to ensure greater protection for clients when paying by card abroad or when withdrawing money from foreign ATMs, if these transactions are accompanied by currency exchange, the so-called dynamic conversion (DCC). |
| The merchant’s obligation to inform the client before the transaction of both the exchange rate used and the payment for this service will also apply. If he does not do so, he will not be entitled to payment for the service. |
| Dynamic Conversion (DCC) consists in the fact that when paying (withdrawal from an ATM), the client receives an offer to perform the transaction directly in Czech crowns (if the payment card is issued to an account in Czech crowns) and not in the given foreign currency (euro, dollar, pound, etc.) . However, the client will pay more for this service than if he had paid in the given foreign currency, and the transfer to Czech crowns would be made by his own bank in the Czech Republic at the current exchange rate. |
| Many Czech banks already allow their clients to block card payments with unfavorable exchange rates. |
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The card needs to be protected
Of course, theft or misuse of a payment card can also happen abroad. So if you lose it, block it in time. In addition, CBA recommends setting lower limits for withdrawals and payments on your card even before the trip and activating notifications of all payments made in internet or mobile banking. It is also a good idea to have the contact phone number for your bank’s customer service saved just in case.
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Many people today use their smartphone to make payments and access their banking. It is therefore appropriate to pay sufficient attention to it as well. If you connect to an unsecured public Wi-Fi network, you run the risk of your data being misused. Therefore, always choose a secure Wi-Fi network when connecting to the Internet, or use your mobile data.
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