What is the best form of payment for purchases abroad?

The dollar is no longer at its attractive levels as in 2009, but the US currency still favors purchases abroad. The prices of products like make-up, perfumes and clothing (not to mention electronics) are unbeatable and anyone who has the opportunity to travel abroad or buy from foreign sites should take advantage of them.

The question is, what is the best way to pay for purchases made in other countries? Until recently, a criterion of choice could be the fees charged, which varied according to the chosen means of payment.

However, a recent decision by the Brazilian government standardized the IOF (Tax on Financial Transactions) for withdrawals, purchases on debit card, prepaid card and travelers checks used abroad at 6.38%, the same amount that was already applied in the use of the. credit card.

Thus, travelers have to consider other factors in choosing their means of payment when traveling abroad. • Should the person take into account how much they should spend on the entire trip, what are the conditions and facilities for accessing banks or ATMs at the place of destination and when will they have the resources to spend (before or after the trip)? advises Emanuella Gomes Xavier, economist and financial planner at WGFP.

Check out the expert recommendations to learn about the main options available in the market and choose the most suitable for you:

1. Cash

With the standardization of the IOF, the use of cash has become the most financially advantageous option as there are no fees for foreign currency exchange. However, it is important to remember that carrying all the money in your wallet is risky anywhere in the world.

• The amount to be taken should only be needed for emergencies, use in places where cards are not accepted (snacks during the trip, taxi and tips, for example) and when we do not know how easy it will be and how easily access to bank terminals will be. loot at destination ?, suggests the economist.

2. Credit Card

Prior to IOF standardization, credit cards were the most financially disadvantageous option. Having now the same rate as other payment options, it becomes an interesting choice especially for those who want to earn more time to pay the travel expenses.

Personal financial planner Leonardo Gomes, however, warns of exchange rate risk, which occurs because the conversion happens only at the due date of the invoice and not at the date of purchase. So you can't know in advance how much you will pay for the product and you may still be surprised by the market variations.

3. Debit Card

A major advantage of debit card over credit card is that the currency conversion value is that of the day, eliminating the risk of significant fluctuations until the invoice date. "If the bank operates at a near-commercial exchange rate, then this will be the cheapest form of purchase available," says Emanuella.

4. Prepaid Card

It was one of the most financially advantageous options before the IOF standardization, but now its main advantage is the possibility of greater control of travel expenses. This is a card that is loaded at a currency exchange using the quote of the day for conversion.

"It is accepted almost everywhere that accepts credit cards," explains financial educator Mauro Calil. Economist Emanuella Gomes Xavier recommends that, before buying the card, it is important to research the quotations practiced in different exchange offices to choose the most advantageous one.

5. Traveler check

They fell out of use for some time mainly due to the popularization of the prepaid card. It required the keeper to exchange it for cash.

More Tips to Get Shopping Right

When traveling abroad, a good way to save even more is to buy your credit card tickets. In addition to the possibility of earning miles (to make the next plane trip cheaper), some card operators offer travel insurance as a bonus on this type of purchase.

Visa and Master flags, for example, offer travel accident coverage for the cardholder and their dependents, provided that the ticket was purchased in full with their own credit card or with miles.

Depending on the type of card, the holder can also count on travel assistance and rental car insurance.Before you travel, be sure to contact your carrier for any international travel benefits.

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