What to Take to Pay When Traveling
Cash and credit cards to take when traveling abroad
When traveling abroad one of the first things you need to consider is what to take. That decision not only includes your choice of clothing, travel accessories and any electronics or gadgets you may need for your trip, but also includes things like cash and credit cards to take when traveling abroad. There are different perspectives on this. Some advocate for taking only one credit card, one debit card, and some U.S. dollars. Others advocate for taking multiple credit cards and exchanging money into the currency you’ll need before you go. I’ve traveled both ways. So which way is the best way? Well, that depends on whether you have scouted your destination and whether businesses or lodging you’ll be using there prefer payment in cash.
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Cash
When planning what cash and credit cards to take when traveling abroad, one might ask, why not withdraw money in that country that you’re in from the ATM? Well if your hotel bills and your other expenses that you budget for in that country exceed the daily limit you can withdraw from your ATM, then it behooves you to withdraw funds before you leave your home country. Most local banks, if they are a moderate to large sized bank, will be able to exchange currency for you before you go at a reasonable rate. Any fees and exchange rate may be at perhaps slightly worse rate than if you took it from the ATM in that country.
While it may be better to simply go to the ATM in the foreign country that you’re in and while I agree that is totally possible and easy to do (I’ve done it before), it may make sense for you to change money before you go. If the discounts on the hotel or excursions that you plan to take end up being more than paying for a slightly worse exchange rate or any fees. In other words, what you save in a foreign country withdrawing money from an ATM and paying with your excursions and or hotel with a credit card, may be negated by the discount you don’t receive for being able to pay in local currency.
For example, on our recent trip we had planned several tours and the tour operator preferred to be paid in local currency, and in doing so gave us a substantial discount. I have also come across this when booking hotels in previous countries that offer a discount on their price of the room versus charging it to a credit card.
Credit Cards
It is still possible to simply charge everything in the foreign country on your credit card. Most small businesses in foreign countries, including mom-and-pop restaurants or a small shop can process credit card payments. If you’re not sure, ask before purchasing or ordering if they except credit cards, if not, then either hopefully you have some cash on you, or you should run to the ATM before sitting down for dinner.
One word on credit cards, some places in foreign countries may be able to charge either in the local currency or in U.S. dollars. Another note on credit cards, make sure when traveling abroad that your credit card does not charge foreign transaction fees. Many credit cards charge a transaction fee when used outside the U.S. A couple that I’ve used regularly from Chase bank have no transaction fees.
Exchanging U.S. Dollars for Foreign Currency
When considering what cash and credit cards to take when traveling abroad, I highly recommend avoiding currency exchange is at airports or near the airport. Those places normally charge a higher rate of exchange versus simply withdrawing money from the ATM or changing money before you go. I also recommend avoiding local ‘hole in the wall’ money exchanges in foreign countries. For one thing they honestly look a little shady to me, and two I like to make sure that when I’m exchanging money it’s from a financial institution versus a questionable ‘business’.
Last, it is good to know before you go what is the prevailing exchange rate for a country you’ll be visiting. For example, if you’re traveling to Europe and you know the Euro is exchanging at approximately €1 to $1.15 then you know that for every euro you’re actually spending $1.15. So, for something that costs €10.00 it really is costing you $11.50.
Hope this brief intro on what cash and credit cards to take when traveling abroad helps but if you have any questions, please leave a comment below.