The Safest Place for Your Important Documents

My husband and I keep a small safe in our house for all of our important papers—from our passports to my son’s birth certificate to our social security cards. One afternoon last summer, not long after I had opened the safe to retrieve something, and left the top up, my husband decided to set a full humidifier on top of the open safe—and of course the inevitable happened.

where to store important documentsAfter that seminal moment in our marriage, I spent an interesting hour clothes-pinning all of our important documents up on a makeshift clothesline in our bathroom. I also started looking into whether our safe was the most secure place to keep all of our documents. Aside from the (admittedly unusual) issue of flooding, I needed to know which papers are better placed in a safety deposit box, and which ones are perfectly fine in your average fireproof home safe. This is what I discovered:

Safety Deposit Box

While the movies may have led you to believe that this is where people stash stolen jewelry, hundreds of thousands of dollars in cash, fake passports, and other illicit materials, the fact of the matter is that safety deposit boxes are the best place to store any paperwork that you would have trouble replacing.

That list of important documents includes birth, marriage, and death certificates, adoption papers, divorce decrees, citizenship records, military records, deeds, titles, wills, and stock and bond certificates. All of these items are of vital importance, and should be protected against the possibility of fire, flood (ahem), or burglary at your home.

The rent for a safety deposit box is relatively inexpensive, and it offers you security and privacy. (However, you should remember that the items in a safety deposit box are not FDIC insured.) Also, that privacy can end up being a Catch-22, particularly if you make the mistake of keeping your original copy of your will—or other important legal documents—in the box. Safety deposit boxes are sealed after the death of the box-holder, meaning your heirs may not have access to the legal information that proves they are your heirs.

This is part of the reason why every family should have a home safe as well as a safety deposit box. Then you have a safe place at home where you can keep information for your family about accessing your safety deposit box in the event of your death or incapacitation.

Home Safe

The most important information you can place in your home safe is information and instructions for your family regarding where you keep your safety deposit box and how to access it, as well as the contact information for your lawyer, your insurance agent, your financial planner, and your bank. This is all information that could be of vital importance to your family in the event of your death.

In addition to this information, your home safe is also where you will want to store other documents and records that you may need to access more often. Those documents include your social security card, passport, tax information, insurance policies, health records, education records, loan information, employment records, bank statements and other financial documents. The home safe is also a good place to keep photocopies of certain documents, like your driver’s license and birth certificate. Both of those pieces of ID could be important to show in case you lose the original of either. Also, having a photocopy of your child’s birth certificate means that you have his necessary identification for travel and other needs without having to worry about losing the original document.

Veterans should maintain a copy of their DD Form 214 in their home safe, along with the documents required for a military burial. Maintaining these in your home safe will ensure you have access to your proof of military service at a moment’s notice, and ensure your family can arrange for a military burial in the event you pass away.

You should also plan on keeping a copy of your will in both your home safe and your safety deposit box, in addition to keeping a copy at your lawyer’s office. This will mean that your family has all the necessary information available to them.

It goes without saying that your home safe should be fireproof and always kept locked (and not just because of freak humidifier accidents). In addition, make sure you stow the safe in an out-of-the-way spot in your house—the better to keep potential burglars from noticing it.

The Bottom Line

Organizing the paper beast, even when it is not waterlogged, can be overwhelming. But knowing that your important documents are stowed in places where they will be safe but accessible in case of emergency is worth taking the time to do.

Image credit: jovike

What to Do If You Can’t Afford Your Student Loan Payment

The average amount that college graduates owe in student loans continues to rise—topping $25,000 according to the most recent data—while job prospects for new graduates are bleak to say the least. Students generally have a six-month grace period after graduation to allow them to find a job before the first payment is due. But since jobs are scarce and the minimum payment can be frighteningly high, that grace period can feel like far too little time.

Whether you are a recent graduate who is unsure how you will pay back your student loans, or someone several years out from attaining your degree who is having a financial setback, there are ways of mitigating the payment problem without defaulting. Here are the options available to you if you can’t repay your student loans:

What to Do If You Can’t Afford Your Student Loan Payment

1. Change your repayment plan.

Generally, you can expect a standard repayment plan of equal monthly payments for ten years. Should that monthly payment prove too high, you have a few ways to continue making payments at a lower rate.

The Graduated Repayment Plan offers you a set amount of time (often up to two years) to pay low, interest-only payments before they increase to the standard principal and interest payments. This plan can be a good place to start for recent graduates who are able to secure some kind of job, but are not yet making the full amount they expect their degree to garner in the future.

The Extended Repayment Plan also lowers your payments, but increases the term during which you will pay. You can extend your term to anywhere from 12 to 30 years. While this will make your monthly cash flow easier, you will end up spending a great deal more in interest over the life of the loan.

The Income-Contingent, Income-Sensitive, and Income-Based Repayment plans take your gross income, family size, and student debt burden into account in determining your monthly payment.

With the Income-Contingent plan, which is only available to Direct Loan borrowers, your payments are adjusted with changes in your income, and your loan term can last up to 25 years. Any outstanding balance on the loan after 25 years is discharged, although you are still responsible for taxes on the written-off amount.

The Income-Sensitive Plan is for FFELP borrowers and determines a monthly payment based upon a percentage of your income. The loan term is for 10 years.

The Income-Based Repayment Plan is available to both Direct Loan and FFELP borrowers and caps monthly payment at a lower percentage of income than the Income-Sensitive Plan

Recognize that any changes to your repayment schedule will end up costing you more in interest. Be sure to change back to the standard schedule as soon as you can afford it—it will save you a great deal.

2. Consolidate

If you have loans from multiple lenders, consolidating them all under one umbrella loan can help to reduce your interest rate and potentially lower your monthly payment. It will also give you only one lender to negotiate with, making any potential problems much easier to navigate.

3. Forbearance and Deferment

Depending on your circumstances, you may just want some kind of break from payments. If you are simply facing a financial downturn, you can request a forbearance of your loan for a specified amount of time—usually a year. During this time, interest will still accrue on your account but you do not owe a monthly payment.

My husband and I each put our student loans on forbearance for about nine months when we moved across the country, as we were carrying two mortgages and I had left my job for the move. We started paying the loans again as soon as our finances were back in order to avoid any more interest accruing.

If you are returning to school, entering military service, or facing disability or unemployment, you can request that your loans go into deferment. For the duration of your deferment, if you qualify for federal interest subsidies, the government will make the interest payments on your behalf, meaning your outstanding balance will not go up.

4. Loan Forgiveness and Cancellation

Those individuals who go into teaching or public service may be able to have all or part of their loans forgiven or cancelled. This is not an easy route to no payments, however, as these programs require as much as 10 years of on time monthly payments and specific criteria for the teaching or service to qualify. If you are a teacher or public servant, find out if you could qualify here. Additionally, the military forgives student loans under certain circumstances.

The Bottom Line

Student loans are like relationships: communication is important! No matter what difficult financial situation you find yourself in, talk to your lender about your options. As long as you are making a good faith effort to pay back your loans, your lender will make an effort to work with you.

Prepare Your Home for Winter

The slight nip to the air in early autumn is a great reminder to homeowners to start getting their houses ready for the oncoming winter. If you grew up in cold climates, this may not seem like anything new, but stick around anyway, you might still learn a few tips to help you save money this winter. If you are new to cold climates, then these tips will definitely help you protect and prepare your home for the coming winter, and more importantly, help you save money. Winterizing your home is an important yearly task that helps your house to better brave the elements and helps you to keep more money in your pockets.

Here are 10 winterizing tasks you should put on your to do list this fall:

Winterize your home

Is yout home prepared for winter?

1. Install storm doors and windows. These outside-mounted windows and doors can increase your home’s energy efficiency by as much as 45%. Not bad for an afternoon’s work. Bonus benefit: Some energy saving home improvements are tax deductible!

2. Have your furnace inspected. While you probably do not need to do this every year (every other year may be enough), it is a good idea to regularly have an HVAC professional give your furnace a once-over to check the carbon-monoxide levels, clean and replace air filters, clean the motor and fan and double-check the gas piping that connects to the furnace. This service will cost you approximately $100, but it is worth it for both the energy savings and your peace of mind.

3. Get your heating ducts checked. While your friendly neighborhood HVAC professional is servicing your furnace, have him take the time to clean and inspect your heating ducts as well. Up to 60% of heated air actually escapes from these ducts before ever reaching the vents and your cold toes.

4. Block air leaks. This can be as simple as shoving a rolled up towel or air “draft dodger” (also known as a bean snake) against the bottom of all your exterior doors. But if you’re willing to spend and afternoon with a thermal leak detector, some weather stripping and a caulk gun, you’ll reap the benefits in your energy bills.

If you live an older home and your windows have uninsulated weight pockets, you can seal up your windows with plastic sheeting from the inside. It’s a little unsightly, but it makes an enormous difference.

5. Reverse your fans. If your home has ceiling fans, know that they are there to help your winter utility bills, as well. Flip the switch so that the fans turn clockwise in winter, and the fans will force warm air down to recirculate through the room.

6. Make sure you have enough insulation. Double check that your attic insulation offers adequate R-value for your area. If not, simply add more on top of the old. Just be sure the new stuff doesn’t have paper backing, as the paper works as a vapor barrier that can cause you problems in the future.

7. Wrap your water heater and pipes. If your water heater does not have an insulating blanket, you should be sure to rectify that as soon as possible. These heaters are often the least efficient appliances in your home, and they have to work that much harder to provide you with hot water when they have no insulation.

As for your pipes, wrapping them with the pre-slit pipe foam you can find at any home improvement superstore can help to prevent your pipes from freezing in addition to preventing heat loss when you turn on your hot water.

8. Bring in a chimney sweep. If you have a working fireplace in your home that you plan to use, do not start your first fire before you’ve had a chance to have the chimney cleaned and inspected. You don’t want to start one of the thousands of chimney fires that occur each year because of blocked chimneys and structural problems.

9. Clean out your gutters. Clogged gutters lead to ice dams in winter. Ice dams occur when water freezes near the edge of a roof, creating a dam that blocks the flow of water off the roof so that it pools in multiples places on your roof. Eventually this can lead to water dripping into your house. So break out your ladder and clean the leaves out of your gutters.

10. Make like your frugal dad. Lower your thermostat and wear a sweater inside when it’s cold out. There’s no need to live in shorts and a tee shirt year round!

Getting your home ready for winter may add to your honey do list, but it will pay off in your bank balance.

Do you have any other tips for preparing your home for winter?

Photo credit: Allen McGregor

Finding a Financial Advisor

This is part four in a series of articles for beginner investors. The first three parts covered why you should invest, types of investments, and the importance of diversification. This article covers finding and hiring a financial advisor.

When it comes to money management, it can feel as if there are two camps: the top hat and monocle-wearing uber-rich types who pay other people to worry about their money, and the rest of us who have to slog through money decisions on our own. Thankfully, nothing could be further from the truth. Every investor, no matter how modest the budget, can benefit from the help of a financial professional. And if you would rather clean your driveway with a toothbrush than make big money and investment decisions, help is available for you!

Types of Financial Advisors

Depending on your needs, there are several different professionals out there who can help you to reach your goals.

Financial Planners

For general money advice—including anything from investments and retirement to life insurance to savings to taxes to estate planning—a Certified Financial Planner (CFP) is your best bet. These financial jack-of-all-trades are a great resource for the average investor, as they can help you to get a good overall look at your entire financial picture.

Financial Planners will generally offer you a free first meeting, during which time you can ask questions about how they can help you reach your goals. From there, advice from the planner can either be charged hourly (a good idea if you have just a couple of specific questions), by the project (great for those who need help in only one area), or on retainer (for those who are looking for a long term relationship).

Although anyone can call himself a financial planner, a Certified Financial Planner is a title regulated by the CFP Board and those professionals must abide by standards of practice and a code of ethics.


This is the sort of money manager that most individuals think of when you mention getting investment help. Stockbrokers (also known as investment managers or wealth advisors) work to maintain the best possible returns for your investments.

In most cases, using a stockbroker is for relatively high rollers—those who have a portfolio of anywhere from $50,000 to $100,000 or higher. That’s partially because you will be paying around $100 to $200 per stock trade, which is too rich for many casual investors’ blood.

If you are willing to do your own research, you can use the services of a discount broker—that is, someone who will do the trading for you at a lower fee than that of a full service broker. Discount brokers generally charge less than $10 for an individual online trade.


Sometimes, you need help in a very specific area. Want to figure out how to leave all your money to the whales? Want to know which 529 plan will be best for your kids? Want to figure out how to minimize your small business’s tax bill? In each of these cases, a generalist might be able to help you, but for the absolute best advice, find someone who specializes in the area where you need help.

However, it could be financially dangerous to simply hire anyone who has put out a shingle for services. This is where getting a reference from your CFP could be invaluable.

Research Before Hiring

It is always a good idea to do a background check or otherwise research an individual or company before hiring them to help you manage your money. The best place to start is by doing an online background check on the financial advisor, which you should be able to do for free with just a few minutes time. If you are satisfied with what you find online, then it’s a good idea to interview the financial planner to understand how they get paid, their investment philosophy, how they can help you, and whether or not you are comfortable with the individual or company. If something just doesn’t feel right, then don’t be afraid to look elsewhere.

When to Call in for Help

It can be tough to know if you’re ready for a financial advisor. Many people wait until they have a major life change to call in the big dogs. There’s nothing like getting married, having a baby or changing a career to make you realize it’s time to get your finances in order. And there’s absolutely nothing wrong with that kind of timing.

However, if you ever feel like you don’t know what more you need to do in order to maximize your financial goals, then schedule a meeting with a pro then and there. It will help you to find a direction or give you the peace of mind to know that you really are on the right track.

To be honest, I think I will always be a little phobic about investing. As a very risk-averse individual, I’m always worried about making the wrong decision. But I know that my financial health depends on my ability to take that plunge. So I’ll test the waters and learn to overcome those fears.

Why You Should Diversify Your Investments

This is part three in a series of articles for beginner investors. The first two parts covered why you should invest, and types of investments. This article covers the importance of diversification in your investments.

My high school Biology class taught me that the health of a particular eco-system could be measured by the bio-diversity found there—meaning, if there were a lot of different species living in one place, you could bet that was an ecologically healthy environment.

Your financial health is similarly reflected by the diversity of your investments. It’s easy to see that putting all of your eggs in one basket is a recipe for disaster—just look at any recent financial scandal from Enron to Bernie Madoff and you’ll find someone who has lost everything because it was all placed in the same poorly managed (to say the least) basket. However, other than knowing better than to give your life savings to a Ponzi scheme or place it all in your mattress, how do you know how to diversify?

Why You Should Diversify your Investments

Here are some basics to keep in mind when trying to maintain your financial health:

Portfolio: It’s Not Just Another Word for Briefcase

You’ll often hear people refer to their investment portfolio. Basically, this is the breakdown of the different ways you invest your money in order to reach your goals. Your portfolio will change throughout your investing career as your goals change. When you first start investing, your portfolio will reflect the fact that you are able to take a long view and will include investments that may be more volatile. You have the time to wait out the market and allow your stocks to recover. If you are closer to retirement, you want to make sure your money stays put and possibly shows some modest growth. In that case, your portfolio will likely focus more on less risky (and lower returning) bonds.

In short, your risk tolerance and time frame help determine the diversity of your portfolio.

Risk Assessment

Determining your risk tolerance is an important part of drawing up your investment portfolio. For those investors who are willing to watch their money go up and down with the instability of the market, a more aggressive portfolio (but still one that incorporates diversity!) will give the possibility of higher returns, while still maintaining some stability. Those who don’t have the stomach for rapid declines can go the more conservative route but still incorporate a few riskier investments that could pay out higher returns. No matter what your risk tolerance is, however, it is imperative that you diversify your portfolio so that no one investment dominates. That allows both aggressive and risk-averse investors to enjoy stability and the potential for growth.

Beware of Sure Things

When it comes to investments, people will sometimes get dollar signs in their eyes and forget the most basic tenet of investing: diversify! If you ever come across a “can’t-fail” investment strategy, back away slowly. There is no such thing a sure thing. Accepting some risk means that you know everything is above-board. The only real way to mitigate the inherent risk of investing is to diversify. Any other scheme is just that—a scheme.

Next week, we’ll discuss how to find a financial advisor to put this all together.

Investment Basics – Types of Investments

Investing for the first time can be intimidating, which is why we are writing this series for beginning investors. The first article in the series covered why we should invest. In it we discussed the importance of investing and how it’s not as difficult as many people believe. In this article, we discuss ways to invest and different types of investments.

Are you familiar with different types of investments? If you think that bonds are British secret agents and stocks are what thieves were shackled into in Colonial America, you’re not alone. Just like any subject, investing has its own vocabulary and it can feel a little intimidating to ask basic questions of an expert. So here is a breakdown of different ways to invest your money, and what they all will mean for your bottom line:

Investment Basics – Types of Investments

Certificates of Deposit

A Certificate of Deposit (CD) is a short-term, debt-based investment offered by a bank. In short, you give your money to the bank who lends it out to someone in the form of a loan. You receive your money back plus interest anywhere from three months to six years later. CDs are very low risk investments, but they also offer a relatively low return on investment. Because these deposits are based on a set time limit, there may also a penalty if you need to withdraw your money prior to the maturity date. Read more about using CDs as short term investments in our article about how to build a CD ladder.

Treasury Bills

A treasury bill (T-bill) is a short-term investment offered by the government. The term is usually less than one year and typically three months. T-bills generally don’t pay interest, but you can buy them at a discount, meaning you yield the difference between the purchase price and the redemption value. This means you actually buy the bond at less than face value and redeem it for face value upon the maturity date. T-bills are backed by the government and offer the closest thing to a risk-free investment available to any investor. However, their very low yield is a major drawback. US Savings bonds can be similar low risk, low return investments.


A bond is similar to a CD in that it is debt-based. Essentially, a bond is an IOU issued by a company. When you purchase a bond, you loan a specified amount of money for a specified number of years in return for interest on the investment. Bonds generally offer much higher interest rates than CDs or T-bills and offer relatively low risk. However, they are long-term investments, which means that your money is tied up for anywhere from 10 to 30 years. If you need to sell your bond before it reaches maturity, the sale may result in a loss. Also, though bonds are relatively low risk, it is always possible that the bond issuer may declare bankruptcy or otherwise default, meaning it is possible to lose money.


A stock is different from the debt-based investments. When you purchase stock, you have in effect become a partial owner of a company—and you get a piece of any profits (known as dividends) that the company allots to share holders. Dividend investing is a popular and proven way to invest in stocks, but if your stocks do not pay dividends (not all do), then you only make money if your stock increases in value. Unlike a bond, your return on investment is not guaranteed with a stock. Stock values fluctuate from day to day, which means that your risk is greater—as are your potential returns.

Mutual Funds

Mutual funds were created in order to allow investors to pool their money in order to buy a variety of investments—and let a professional money manager determine the best use of the investors’ money. Mutual funds are an easy way to diversify your investments (more on that next week). However, many mutual funds charge management fees of around 2% (the professional money manager needs to take a cut) and their performance depends on how good your fund manager is.

Index Funds

Index funds are similar to mutual funds—they allow investors to pool their money to purchase stocks in a large number of companies, giving them the opportunity to invest in a variety of companies without buying hundreds of individual stocks. The main difference between index funds and mutual funds is active management vs. passive management. Mutual funds are managed actively, meaning the portfolio manager actively chooses which stocks to purchase based on the mutual fund goal, and index funds are passively managed, meaning the stocks in the index fund are based on a preset list of stocks. Most index funds track a market index such as the S&P 500, NASDAQ, Wilshire 5000, indexes which track foreign markets, and similar stock market indexes. The goal of an index fund is to simply match the market as closely as possible, while not charging investors as much money in fees as some actively managed funds charge. Learn more about why index funds are attractive investments.

Gold, Silver, Precious Metals, and Commodities

Many people feel the stock market is too risky and prefer to invest in a physical asset such as gold, silver, precious metals, or even commodities. These investments can be a good way to diversify your investments. However, like most investments, it may not be a good idea to maintain a portfolio which 100% invested in precious metals. Learn more about investing in precious metals.

Which type of investment is best?

Each of these investments has its own set of pros and cons, and they can all be appropriate for investors based on their individual investment needs. In most cases it is a good idea to use a variety of different investment types in one portfolio. Next week, we’ll take a look at why diversity is important in your investments.

An Introduction to Investing for the Phobic – Why Should You Invest?

Investing. We all know we should do it, but it’s easy to put it off for another day. Why is that? Well, there are several reasons – from not knowing how or where to invest, or not knowing when to use the services of a professional advisor. Over the next few weeks we hope to cover all of these topics to give you a better idea of how to start investing so you can take care of your long term financial needs.

Are You Afraid of Investing?

As a personal finance blogger, I’m ashamed to admit this, but the surest way to see me break out in a cold sweat is to ask me what I think of the stock market. I may have an excellent handle on my budget, my income-to-debt ratio, and even my savings accounts, but when it comes my investments, I’m not sure which end of the mutual fund is up.

I am lucky in that my father is a financial planner and has picked up a great deal of the slack for me in my fear of investing and getting more involved in my long term money plans. So I’m not keeping my retirement fund in my mattress—but only because I have someone who is looking out for my best interests and who is very savvy about what will work for me. However, it is more than time for me to face my invest-o-phobia. Here, in the first part of the introduction to investing, are three reasons why you (and I) need to get over the fear and start investing:

Why Should You Invest?

Compound Interest Chart

Compound Interest = Investment Growth

1. Take advantage of compound interest. We’ve all seen the numbers magically grow in the charts comparing the compound interest of an investor who started young versus an investor who waited. But it’s important to understand just how much compound interest will affect your investment.

Most CDs (certificates of deposit) or government bonds have historically grown at about 5%, though we are presently seeing lower returns. Historically, investing in the stock market will earn you a return of about 10% over the years. The difference between those two types of investments means the difference between a $300+ return on a $100 investment in 25 years and $1000+ return on the same investment in the same time frame. So no matter how phobic you may be about investing, it really does pay to do your homework and find a strategy that will make compound interest work for you.

2. Retirement is now your responsibility. It used to be that working at the same job for 20 or 30 years guaranteed a pension that would let the golden years take care of themselves. This is still true for military members and some government positions, but unfortunately, pensions in the private sector are few and far between. If you are lucky enough to have a pension, it may or may not be enough for you to live on without another source of income. Even a military pension may not be enough for retirement. (read more about how much a military pension is worth). These days, if you want to ensure that your retirement years are not spent eating Ramen noodles, then you need to take charge of your investments.

3. Only you can know your goals. It would be wonderful if money dropped from the sky any time you might need it. But just like retirement, your life goals are your responsibility—whether you want to be able to pay for your child’s education, a trip around the world, or that house on the lake you’ve always dreamed of. Without investing your money to be ready for these goals, they may as well be airy dreams. And putting your money to work for you in a way that feels comfortable within your level of risk tolerance gives you control over your life goals. Stuffing money in a mattress will never give you that level of power.

Next week, we’ll look at ways to invest your money.

Photo credit: graafik

Avoid Credit Card Problems While Traveling Abroad

You would think that dealing with money while traveling abroad would no longer be a big deal in 2011.  After all, in the modern world, there’s no more need for traveler’s checks or cash hidey-holes stitched into your clothing.  Just a quick swipe of a credit card, and you’re ready to go.  Unfortunately, the magic of credit cards does not necessarily mean that your trip abroad will be smooth sailing.  Here are some of the unexpected pitfalls you may encounter when traveling overseas with your credit card—and how to deal with them:

Avoid credit card problems while traveling abroad

1.  Having your card shut down.  If you neglect to mention to your credit card issuer that you will be traveling, that can sometimes flag your foreign purchases as suspicious activity.  If you’ve ever had unauthorized charges on your card, you know that your credit card company will contact you to determine if the suspicious charges are legit or not.  If you’re out of the country, the issuer will not be able to reach you through the normal channels and will assume someone has stolen your card, leaving you with a useless square of plastic in the middle of a charming village on the Mediterranean.

  • The Solution:  Call your credit card issuer’s customer service line to give them a head’s up a few weeks before your trip.

2.  High international transaction fees.  Some credit cards make out like bandits on international transactions, where they charge “currency conversion fees.”  These fees are generally a percentage of the dollar amount (meaning the cost in foreign currency is converted by the credit card company).  What makes these fees really insidious is the fact that both the credit card company (think Visa or MasterCard) and the issuing bank charge their own separate fee.

  • The Solution:  Find out ahead of time how much you will be charged for your purchases on vacation.  Some credit card companies, including Capital One and certain American Express cards, have no international transaction fees.

3.  American cards might not work at all in Europe.  All American credit and debit cards rely on magnetic stripes in order to process information.  Unfortunately for American travelers in Europe, the old country has almost universally switched over to microchip technology, meaning your cards could be useless.  While MasterCard and Visa require all merchants to accept their magnetic-stripe cards, sometimes cashiers (and unmanned pay kiosks) are unable or unwilling to accept your American plastic.

  • The Solution:  Travelex offers a preloaded MasterCard debit card that features the microchip technology accepted all over Europe.  This is a great card to carry with you for the instances when your card isn’t accepted—but don’t let it be your only way to pay.  While there is no fee for using the card, the exchange rate for loading it with foreign currency isn’t great.

4.  Identity theft.  As much of a nightmare this might be while you’re home, it’s that much more difficult to deal with while abroad.  Though European countries do not have a great deal of crime, pickpocketing is rampant.  So it’s important to keep your wallet and credit cards in a difficult-to-reach pocket in crowds and be vigilant when you are using the cards.

  • The Solution:  The best way to deal with theft of credit cards abroad is to cancel them as soon as possible.  So make sure you write down your account number and card issuer’s contact information and place it all in a safe spot (like a discreet pocket in your luggage).

A little planning ahead can ensure that using your credit card will be the safest and most convenient way to pay while you’re abroad.