Although the above options great for really experiencing the land, sometimes you just want to get to your destination—fast and for cheap!  Thankfully, the budget traveler has Europe’s gift to travelling mankind—their no-frills carriers.

Yes, these airlines redefine the concept of no-frills. Sure, you’re not expecting ample legroom, or a gourmet meal. But these guys take it to a whole new level—like charging for checked bags, or checking in at the airport instead of online. Some may even seem tacky, like advertisements in all seatbacks.

But, in exchange for some “amenities”, you are likely to find tickets that are cheaper than lunch! Many times, these airlines just give away their seats, charging you only for tax. Even with the extra charges for bags and such, you come out ahead.

I remember my first trip on one of these carriers—I was travelling from Barcelona to Venice, and found a seat for 30 euros on RyanAir. Not bad– worth the no-frills experience in itself.

Of course, it isn’t for everyone. You’ll need to be flexible to get the best fare. And, these airlines tend to use out of way airports, like Girona instead of Barcelona, and Rome’s Campiano instead of DaVinci Fiumicino.

I like to look at it this way—if you’re paying bus fare prices, compare what you get to an actual bus, not a full fare carrier. So, yes, you may not get a meal or even a snack without paying, but what bus will provide even that option? You may have to trek to an out of way airport, but calculate your time savings overall versus a bus. You’ll likely find that you’ll benefit despite the small inconveniences!

Some low fare carriers:

RyanAir

EasyJet 

Other resources

Attitude Travel guide to low cost airlines

http://www.attitudetravel.com/lowcostairlines/europe/

No-frills Air

www.nofrillsair.com

The small matter of money
Unless you’re writing a book on the joys of penniless European travel, or something of the sort, you’ll need some local currency. Of course, as with everything in life, there are a myriad of choices for currency exchange.
The two factors to look at when changing money are:

Transaction Fees: This is what is charged to actually execute the transaction—it may be a percentage of what you’re exchanging, a flat rate, or a combination. Some actually charge no fee, but hammer you on the next item–

The Exchange Rate: The actual amount of foreign currency you get for your dollars.

So, on to the choices, then…

Converting at the airport or other Bureau de Change

Although convenient, this is the most expensive option. Companies such as Travelex have booths set up at major airports and tourist locations. You hand them your cash, they give you the local currency, minus a chunk for their fees. On top of that, you are likely to also get ripped off on the exchange rate. It’s best to avoid this option. Banks are a better alternative, however, they are a bit less convenient to find.

Travellers Cheques

Although this used to be a popular option, it’s much less prevalent nowadays. Basically, you purchase travelers cheques before you leave, either in dollars or in your destination’s currency. The number one advantage to these are security—if they are lost or stolen, you can have them replaced within 24 hours. Of course, this option is useless if no merchant actually accepts travelers cheques, which is increasingly the case. You will be forced to convert at an expensive Bureau de Change or bank—same problem as above. Alternatively, some companies offer a travel cheque card that works similar to a credit card. Although more widely accepted, you will pay dearly for this option .

Welcome to the 21st Century
Yes, just as we use credit cards and ATMs at home, the rest of the world has also caught on. It is commonly recommended that travelers use these while going abroad. However, there are a few pitfalls to watch out for. While you’re enjoying your new, exploring its sights, and spending some serious cash, your credit card company may be laughing all the way to the bank! Although we will be looking specifically at credit cards, don’t miss our piece on foreign ATMs here.

Secret Fees
Remember those 10 page long contracts that required a magnifying glass and the patience of a monk to peruse? Buried in all the 2 point font were so called disclosures for foreign transaction fees. While credit cards tend to be a better deal overall versus exchanging cash or travelers cheques, some are better than others. Visa and MasterCard levy fees of 1% on all purchases abroad as a foreign currency conversion fee. Even worse, the issuing bank may charge even more surcharges on top of that, perhaps another 2-3%. What’s worse, all these fees are generally buried in the exchange rate printed on your statement, so you may not even notice that you’re being charged at all. But, most credit cards do charge.
“Big deal—what’s a couple of bucks”, you may say. Well, those dollars can add up to a huge chunk of change. Plus, why give the credit card company more money for doing…what, exactly? It’s a principle thing…
So, what’s the solution? Simple—there’s one card out there that not only charges no foreign transaction fees, they will eat the cost that Visa and MasterCard charge. On top of that, you get the interbank exchange rate, which is the same rate that banks are able to get for volume transactions.

So, save on nonsense fees, and spend your cash on the important stuff, like cheesy souvenirs for your cousin Vinnie…or “mas cerveza por favor!”

Salud!

Click here to apply for the Capital One card.

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Using foreign ATMs

Your hand reaches in your pocket, and…nothing! Oh, no! A victim of pickpocketing? Not so fast, pal…more likely, you just spent your last euro cent on that exotic…McDonalds vanilla cone…with sprinkles.

Yes, a fact of life is that, at some point during your travels abroad, it is likely that you will need some cash. Unless you want to be walking around carrying around wads of 100’s, your best bet will be doing what the rest of the civilized world does… withdrawing from ATMs.

Sounds great, right? Just use your current bank’s ATM card, and voila! Local currency on demand! Just one problem– try digesting your current bank’s fee schedule—foreign transaction fees, surcharges for using unaffiliated ATM’s, using the card on the third Saturday of the month while wearing a clown outfit fees—you get the picture. Some banks charge a flat fee, others tack on a percentage of your transaction.

A better option

Because it costs them less to administer, many banks offer attractive options for online bank accounts—high rates, easy access via ATMs and money transfers, and no fees. Nowadays, it’s easy to be up and running with a new online bank account-you can still keep your regular account, and easily transfer money between accounts. The savings on fees can really add up, making it a no-brainer to put in the miniscule effort required to open one. Of course, you should avoid keeping your dollars with gimme-your-money-i-promise-ill-keepitsafe.com. There are a number of reputable international banks that will give you good bang for your foreign buck.

The most straight forward option is getting an account that charges no fees for foreign transactions. Just use the card as you would any other ATM. You withdraw in the local currency, and your statement will show the transaction in dollars—with no fees built in from your home bank. Plus, the actual exchange rate will likely be the best you can find—since banks get a wholesale rate, known as the interbank rate, which they can pass along to consumers. Keep in mind, however, that the bank that operates the ATM may still charge you a fee—unfortunately, this is out of the control of your U.S based bank. Nevertheless, you’ll still be better off doing that versus changing cash or getting a double hit on the fees—both from your bank and the ATM. CapitalOne offers an online money market account with no foreign transaction fees, no minimum balance, and a great rate. Plus, you can opt for a rewards account, which gives you points towards airline tickets.

So, what exactly is a money market account? It’s just like a savings account, except it pays a higher interest rate. How do they do that? By placing certain limits on withdrawls. Ah, the fine print. But, it’s not as bad as you think. Most online accounts nowadays place restrictions on withdrawls through checks and online transfers, but let you withdraw from the ATM as many times as you like. For Capital One, you can take out up to $500/day. Of course, for anything more than that, its wise to use a no foreign transaction fee credit card like this one.

So, be prepared for your trip abroad—with the right ATM card in your wallet! And reward yourself with an extra latte for all the money you saved!

Salud!

Click here to apply for CapitalOne’s Direct Money Market Account

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Money matters abroad