Key items to put on your financial checklist before travelling abroad for the holiday season

Many South Africans may be planning their next international vacation as the holiday season approaches and more countries continue to lift travel restrictions in order to reopen the global economy.

Given the logistics of an international trip, however, extensive planning and preparation are required to avoid a failed trip and excessive spending.

“There are a number of financial considerations that travelers need to keep in mind from an offshore spend perspective, including individual allowances that SA residents need to comply with from an exchange control perspective,” says Chantal Robertson, Head of Cross-Border Advice at FNB.

Expanding on this, Robertson provides a helpful checklist to ensure that your trip abroad is trouble-free and within budget:

Make sure you have travel insurance: Travel insurance covers medical emergencies while traveling, including the cost of medical treatment up to a certain limit, whether for a medical condition or an accident. It also covers trip disruptions such as trip cancellation or curtailment for any reason, as well as booking cancellations made by you or the tour company.

When withdrawing cash, be wary of withdrawal fees: There is a withdrawal fee (for example, €4 in Europe), but because using a Global Account Debit card is a more secure way of making purchases, it is recommended that cash be withdrawn using this card at an international ATM only when necessary (for example, when bank cards are not accepted).

For international card transactions, use your Global Account card: When using a local credit or debit card, the currency conversion rate is increased by 2%.

However, if you use a Global Debit card in the currency of the country, there is no conversion rate at all.

For example, if you travel to Europe with a Euro Global card, there will be no additional fees or commissions imposed – it will be the same as spending in South Africa.

Even if you spend in another currency, such as the Australian Dollar, the conversion rate is only 1%, which is still significantly less than your local credit card fee.

Take note of your Single Discretionary Allowance (SDA) limits – The SDA covers all personal foreign payments and transfers, including travel, gifting, and foreign investment.

It is critical to remember that any purchases made with your local debit or credit card while traveling is also allocated to the SDA. Based on the identity number, these limits are reported and controlled at the individual level.

According to the current rules, SA residents (18 years and older) are entitled to the following:

• Annual Single Discretionary Allowance of R1 million (SDA)
• Annual Foreign Investment Allowance (FIA) of R10 million, subject to Tax Clearance

When traveling with your partner, a simple way to manage these limits is to use both allowances. If your SDA is fully or nearly fully utilized, the following options must be considered:

Making use of previously externalised funds you can, for example, use funds from a Global Account. The cards associated with these accounts can also be used without affecting your SDA.

When traveling with your partner, a simple way to manage these limits is to use both allowances. If your SDA is fully or nearly fully utilized, the following options must be considered:

Making use of previously externalised funds you can, for example, use funds from a Global Account. The cards associated with these accounts can also be used without affecting your SDA.

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