STRETCHING YOUR MONEY OVERSEAS

Thousands of local travelers will head to foreign countries during the coming year. Most want the best trip for their money. Travel budgets and expenses vary widely, but certain walletstretching tips hold true, no matter where you're headed. Here are three.
The availability of the Internet makes it easier than ever for travelers to put together various components of a trip - researching and booking the transportation, accommodations, entertainment, even meal reservations online. But when it comes to getting a good deal with maximum convenience, it's hard to beat trip packages assembled by airlines. Programs that include round-trip transportation, a selection of hotels, rental car and a menu of amenities tend to be priced as much as 20 percent less than if these items were booked separately.
These are not group or conducted tours, but independent trips that offer choice and flexibility. All of the major carriers that service Pittsburgh International Airport offer vacation packages to a variety of destinations, domestic and international. These packages are often the best deals a traveler can get without doing a lot of hard-rock mining.
Tip two: Be a savvy currency trader. As explained in an earlier column, when abroad, the cheapest, fastest, most convenient way to get foreign currency at the best conversion rates is through an automatic teller machine affiliated with either the Cirrus or Plus networks. Paying for purchases with a credit card is usually the next best way to get good exchange rates. Banks and exchange offices generally offer good rates, while the least favorable rates are found at hotels, stores, restaurants and airport exchange booths (except in China where foreign exchange rates are mandated by the government and the same throughout the country). Traveler's checks are the next best exchange option. They provide protection for loss or theft and usually are converted at slightly better rates than greenbacks.
Finally, use all your foreign currency before you come home. Conversion back into U.S. dollars entails another exchange fee. Spend extra cash at the airport or drop it in charity boxes found there. Stashing foreign coins in a dresser drawer only ensures they'll never get spent, although they can provide the kids with interesting playthings.
Tip three: Before making any major purchases abroad, ask about applicable taxes, which can signifi cantly increase the overall cost. On certain luxury items in France, for instance, sales taxes can add 33 percent to the final bill. That can make for a nasty surprise.
Other types of taxes may be built into an item's price.
Value-added taxes are foreign in the United States, but many countries have had them for decades. Because these taxes are assessed during the production and distribution process rather than at the point of sale, they're somewhat invisible. The tax varies from country to country and item to item, but they can add 5 percent to 20 per cent to a price tag.
But what has been added can also be taken away.
Many countries that levy value-added taxes allow foreign visitors to claim refunds when they leave. That effectively reduces the selling price of an item. Usually, refunds are only provided for goods physically carried or mailed out of the country, but some countries, such as Canada, also allow travelers to claim a rebate on the price of their hotel rooms.
The process by which individuals claim these refunds varies.
Refunds of the 7 percent Canadian Goods and Services Tax can be easily processed at designated duty-free shops at international airports and border crossings. The refunds, which cannot exceed $500, are paid in cash on the spot.
The VAT refund process in Europe has also been simplified. All member nations of the EEC participate in a program called Europe Tax-free Shopping. Travelers show their passports to participating merchants and receive an ETS voucher for the amount of the refund, less a fee of about 20 percent. Most countries require visitors to spend a minimum amount in the same store on the same day, although smaller purchases can usually be totaled on a single form.
Then, when they leave the country, travelers show their purchases and vouchers to the appropriate customs official at the airport or border crossing who validates the refund.
In some cases, refunds in the country's currency can be obtained on the spot. If not, have the refund allocated to your credit card account. Otherwise you'll have to wait for a foreign currency check to be mailed to your home address. That can take several months, and the check you receive will likely be complicated and expensive to cash.

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