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Travel Safety Plan: Preparing for a Financial Emergency on your Trip

Even if you're a seasoned traveler, unexpected situations can arise. Be prepared with a travel emergency fund.

Whether you're a seasoned or novice traveler, travel emergencies can (and will) happen. But it doesn't have to ruin your trip or your life when you return home. You just have to take a few steps to prepare.

  1. Get travel insurance and if applicable, supplemental medical insurance for overseas travel. Insurance can provide reimbursement for the costs of canceled flights or tours, lost luggage, a lost passport and certain medical expenses.
  2. Leave a copy of your itinerary, passport and bank and credit card details (account numbers, expiration dates, security codes, and contact phone numbers) with a trusted family member or friend, just in case.
  3. Call your credit card company to let them know when and where you will be traveling so charges won't be flagged as fraudulent.
  4. If traveling to a country that uses a different currency, convert some dollars before you leave to cover transportation and other immediate expenses when you arrive. Check for the best exchange rates and compare currency conversion fees.

Even if you take the basic travel preparations, there are some unexpected and unhappy events that your planning may not cover:

  • Your passport or wallet is lost or stolen. What do you do?
  • You have a pre-existing medical condition that flares up while on a cruise or traveling in another country. You need medical attention but your travel insurance doesn't cover pre-existing conditions.
  • A transit strike has shut down airline and train service in a foreign country, and renting a car and driver is going to cost you money upfront.
  • The hotel you've booked is oversold, and finding a new place to stay will cost a lot more than you planned.
  • You're driving your RV and have a run-in with a concrete island costing you thousands of dollars in repairs.

You may think that you can always rely on your credit cards, and in many instances you can. According to a 2017 Learnvest study, 74% of Americans have gone into debt to pay for a vacation.1 If you have an emergency while traveling, that debt could skyrocket. Nothing ends a relaxed vacation mood more quickly than a massive credit card bill, high interest rates and pondering the repayment plan.

That's when you'll be glad that you have a travel emergency fund.

Your fund doesn't have to be a lot of money. It just needs to provide a financial safety net should something happen. Here are some guidelines on how to determine the amount you should put aside:

  • Have enough money for an immediate plane ticket home from wherever you are.
  • Have enough cash to cover hotel and food expenses for a few days should your cards be lost or stolen.
  • Have emergency funds in order to pay any medical expenses. Even with medical coverage on travel insurance, you will most likely be responsible for paying the costs upfront and will have to wait to get reimbursed by the insurance company.

The idea of a vacation is to have fun, relax and enjoy your time away from work and everyday life. If traveling for business, you want to be able to focus on the purpose of the trip, not spend your time handling an unexpected financial crisis.

Having an emergency fund could be the best travel insurance of all. And having your money in a separate, high-yield savings or money market account makes a lot of sense. You'll earn interest on your balance and have access to the money if you need it. And, if you have your account at an online only bank, your emergency fund will most likely be earning higher-than-national-average interest so they will be steadily growing while you're traveling.

Visit CIT Bank for information on savings accounts and interest rates.

From a job loss to medical expenses, learn more about emergency savings and how you can be better prepared financially for the unexpected.

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