It’s like you can avoid all of these fees, but if you can reduce the amount that you’re paying, that’s more money you can spend on your trip. Once you know about the fees and charges below, you can take the steps to avoid them. Always take the time to look over your trip details so you’re not paying more than you have to.

Foreign transaction fees 

A lot of travellers don’t realize that they’re likely getting charged 2.5% whenever they use their credit card to make a purchase in a foreign currency. What makes this foreign transaction fee even more annoying is that it can go as high as 3.5% when you use an ATM. Plus, you still need to pay any one-time fees. As you can imagine those

The good thing is that you can avoid this fee if you use a credit card without foreign transaction fees. If you need to get cash, I recommend using STACK, this prepaid card doesn’t charge any foreign transaction fees or ATM fees (although some foreign ATM fees may charge a one-time fee). Best of all, if you sign up with my referral link, you’ll get $5 for free! You must click the link via your mobile device for it to work.

Dynamic currency exchange 

Here’s another fee that is hidden in plain sight. Sometimes when using your credit card abroad, you’re given the option to pay in your home currency or the local currency. Always select the local currency since the home currency option (known formally as the dynamic currency exchange) is set by the merchant.

It’s not uncommon to see the dynamic currency exchange set at a higher rate compared to the formal exchange rate set by the credit card issuer (Amex, Visa, Mastercard). Even if you have a credit card without foreign transaction fees, you’ll be charged extra if you select to pay in Canadian dollars (since the fee is baked in already). Keep in mind that quite often the prompt for your home currency or the local currency is in the local language, so don’t let the sales rep just keep pressing OK or continue for you.

Roaming charges 

International data plans have become cheaper over the years, but there are still ways to save. Generally speaking, you should never just roam with your regular plan. You need to purchase an international plan with your home carrier or get a vice and data plan with a different provider such as KnowRoaming.

The best part about KnowRoaming is that they use a sticker that attaches to your home SIM card so you can still take calls from your home number when abroad. Alternatively, they have a SIM card option which might be more convenient for some users. If you’re interested in KnowRoaming, my referral code gets you 50% off the SIM sticker and a $10 credit. The referral code is also good for the SIM card, but you don’t get additional credit.

Checked baggage fees 

Just about every airline now charges for checked baggage when flying within North America so it’s your best interest to pack carry-on luggage only. Packing may seem impossible at first but it’s easier than you think. Remember, you’re technically allowed to carry on 2 items; one standard article, and one personal article, plus there’s nothing stopping you from wearing layers onto the plane. A family of 4 who uses carry-on luggage only can avoid this travel fee and instantly save $200 on their trip.

If you fly WestJet a lot, the WestJet RBC World Elite Mastercard gives the primary cardholder and up to 8 additional people on the same itinerary their first bag checked free. Both TD and American Express have announced that their new Aeroplan credit cards will also come with free checked bags on Air Canada flights.

Car rental insurance 

You obviously need auto insurance when renting a car, but you may already have it. If you own a car at home, your standard insurance policy usually carries over to rental cards which means you can decline any insurance that the car rental agency offers you.

Even if you don’t own a car, you might still have car rental insurance. Many of the best travel credit cards in Canada offer travel insurance as a standard benefit, so when you make your reservation, be sure to use a credit card that will cover you in the event of an accident. Keep in mind that to qualify for your credit card insurance, you need to decline any insurance offered by the car rental agency. Don’t forget to read your own car rental insurance policy before you depart just so you know what you’re covered for. For example, it may or may not include third-party liability insurance.

Toll fees 

Tolls aren’t very expensive but if you’re renting a car you really need to be mindful of them. Many highways and bridges no longer have a physical person collecting tolls, instead, a transponder is required, or they’ll take a picture of the license plate and invoice the owner later.

When you can, use the cash fare lanes. It may also be worthwhile to get a rental car that includes a transponder (which may cost extra). Some car rental agencies will allow you to pay for your tolls after you’ve returned your car, but that requires you to keep a detailed log of your travels. If you fail to inform them, you’ll be sent a bill later and you’ll likely have to pay an additional administration fee.

Resort fees

Let’s be clear, the only way to avoid resort fees is to book a property that doesn’t charge them. I’ve only listed resort fees in this article as they are something that can surprise you if you weren’t expecting it.

Quite often the resort fees are charged the day you check out and they can cost you $25 – 50 a day which is no small amount. You can obviously charge it to your credit cards, but imagine you’re ready to go home and then you find out you need to pay $200+ in fees? That would just be annoying so look into them before you make any reservations.

Medical bills 

Once you leave home, the cost of healthcare can be quite expensive. A quick trip to the emergency room in the U.S. could you hundreds, if thousands of dollars, so make sure you have travel medical insurance.

Interestingly enough, there’s a good chance you already have free travel insurance. Some employers offer travel medical insurance as a standard benefit. Alternatively, if you have a travel rewards credit card, make sure you book your holiday on that since it’ll usually have a comprehensive insurance policy which might include trip cancellation/interruption and lost/delayed baggage.

In a worst-case scenario, you can easily purchase travel insurance on your own for just a few dollars a day.

Final thoughts

Travel fees and charges are an absolute pain, heck anytime you need to pay something when it can be avoided sucks. When travelling many people tend to ignore their spending but that’s a huge mistake. Any money you’re able to save can be used towards your next vacation so try your best to avoid these travel charges whenever you can.

When it comes to credit card charges, we won’t be able to eliminate them completely. But with some simple adjustments to our spending, we can come pretty close to paying next to nothing, when paying with plastic.

Credit card fees to be aware of

I don’t think I need to explain why paying 19.99% interest is a bad thing. It’s the other credit card charges that aren’t always obvious that we need to worry about.

Annual fees – Credit card annual fees are pretty common with premium cards but that doesn’t mean we need to pay it. When signing up for a new credit card, many companies will waive the fee for the first year. Once approved, make a note in your calendar and cancel it before the fee kicks in the following year.

If you prefer not to cancel your card every year, check with your bank to see what you need to do to qualify for a free premium credit card. The bank will usually just waive the yearly fee if you have a certain type of account with them. The account may require you to keep a minimum balance, but it’s probably worth it if you’re getting the fees waived on a premium credit card.

Cash advance fees – Credit card providers make easy to borrow cash with “convenience” cheques, and the ability to withdraw money right from an ATM. However, the credit card charges are so high, it’s never worth it.

Credit card cash advances will almost always have a higher interest rate than if you made a purchase directly with your card. There’s also the cash advance fee that’s charged based on how much you’re taking out. Sure it’s only 1% in Canada, and there’s a cap, but why use cash advances at all? Finally, there’s no grace period with cash advances– you’re charged interest on the amount you borrower immediately.

The only time a cash advance should be considered is if you have a positive (credit) balance currently on your account. Many travellers do this as a way to get money abroad, but since most debit cards now use the VISA Plus network, there’s no real reason to do this anymore.

Paper statements – If your bank or credit card provider charges for paper statements, then the obvious thing to do is to go paperless. Statements will always be available free online, and you can set up your account to email you when the statement is ready. Paper statements might only be a few dollars, but it’s a waste of money no matter how you look at it?

Foreign transactions – Foreign transaction fees are sneaky since they don’t show up separately on your statements. Whenever you make a purchase in a foreign currency, VISA adds 2.5% right into the exchange rate. So you’re basically paying the spot rate + 2.5%. If you’re getting a refund in a foreign currency, do you think you’re getting that 2.5% back too? Nope.

To avoid this fee, simply pick up one of the Canadian credit cards with no foreign transaction fees.

Final thoughts

If you want to avoid credit card charges completely, then stop using credit. Okay, so that’s probably not a realistic solution, but it does work. The best solution is to simply pay off your full balance every month, and to not treat your credit card like “cash”. You also want to avoid any additional services that your credit card provider might try to sell you. Some fees are unavoidable, but you should be able to minimize them.

This is not a post about how to avoid paying your DSC fees, but rather a story of how I got mine waived.  I honestly felt my advisor was taking advantage of me so I looked at my records to build my case.

Help from a stranger

I have openly admitted that my biggest fault was not doing my due diligence; I took what my advisor told me for his word.  I honestly believed he was looking out for me and wanted to work with me.  For a while I was happy until one day a random stranger on a message board advised me to look into my management expense ratios (MER) and DSC fees.

For those unfamiliar with an MER, it’s a percentage that is subtracted from your account regardless of your returns for the year.  An MER averages 2-2.5% which may not sound like a lot, but over the course of your lifetime it can add up to quite a bit.  A DSC gives the advisor a fat 5% commission right off the top but as the investor you are charged a percentage of your portfolio if you decide to pull out your funds early.  Check out Preet Baerjee’s new book  Stop Over-Thinking Your Money! The five simple  rules of financial success for more info on fee structures with mutual funds.

Before this message board stranger mentioned MER’s and DSC’s I had never even heard of them before.  As you can imagine I was shocked when I found out what I was really paying.  My advisor told me he was being compensated by a minimal amount, which is technically true, but not once did he ever tell me that his commission was a fraction of the MER I would be paying no matter what.  I should note that he legally didn’t have to tell me that he would be getting a higher commission by putting me in certain funds.

I found out that all the funds I was in were back loaded and if I wanted out I would be charged a DSC fee of about 5%.  My heart sank at the thought of losing that much money.  Not once was I ever told about this back end fee.

My advisor wasn’t looking out for me

For a while I was ready to eat the loss.  I felt that taking the loss was worth it to cut my ties with my advisor.  Also I couldn’t understand why I was put into back loaded funds when I had made it clear I might need my cash for a possible home purchase in the near future.  The money I was investing need to be safe.

I decided to ask my advisor this, perhaps he had a legit explanation and maybe there was something I was missing.  His response was if I was not happy with my results he could switch my funds to something with more risk.

Okay this answer made no sense, I was asking about fees and misrepresentation and he answered with something completely irrelevant.  There were plenty of earlier signs of his incompetence but it was clear he wasn’t interested in salvaging our relationship.  This would be the last time I would speak to my advisor.

I was convinced that my advisor was lining his pockets with my funds.  Now this was a serious accusation so I needed proof and the proof was in the details.

Preparing my case

I went back and found all the prepared statements my advisor had given me since we first met.  After our original meeting he presented me a plan in writing that clearly stated I was planning on buying a home.

Curious, if he knew I was planning on buying a home soon why put me in a fund that a) was heavily weighted in equities b) had a back end fee.  If he was looking out for my best interests it would have made more sense to put me in a fund that was more weighted towards fixed income and had no fees.  Sure this was my RRSP and it was long term, but again it was clear in writing that I might be taking advantage of the home buyers plan.

Since my advisor was no longer speaking with me I contacted his manager and explained the situation, right away he agreed that it made no sense that I was in a back end funds.  He was also disappointed to hear that MER’s and DSC’s were not properly disclosed.  He promised me he would look into it and asked me to send in any supporting documents I had.

I decided to check my old e-mails to see what I could find.  A quick search in my e-mail revealed more evidence that supported my suspicions.  It also gave me evidence to show that my advisor was pushing products that didn’t quite fit my profile.

Making my claim

I forwarded all these e-mails to the manager and he promised me he would get back to me shortly.  After a week he contacted me and said all the evidence I provided supported my claims and the firm would waive all DSC fees as long as I agreed to sign a waiver that I would not be seeking further compensation.  Considering I was ready to pay the fees just to be rid of this company I was more than happy to accept their settlement.

A message board stranger, research, and good bookkeeping are the reasons I was able to get my fees waived.

A few months after I had left the firm I had found out that my advisor was let go.  Turns out the internal investigation revealed that he had made some very questionable investments for other clients, all of which seemed to maximize his commissions.  I indirectly was the whistleblower.

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This post has been slightly modified from its original version which first appeared at canajunfinances.com a popular Canadian personal finance blog

Image courtesy: Drew Coffman via StockPholio.com