Travel Money

Choosing the right type of money to bring on a trip abroad is an important decision.

travel moneyPicking the wrong format can lead to inconvenience, delays, and add up to costly mistakes.  You need to consider what your likely expenses are, what types of payments your larger planned expenses will accept, and consider the climate & security for where you're travelling to.

Options to consider include: Cash, Travelers Checks, and Debit or Credit cards

The Good and Bad for each type of Travel Money:


Convert your money into the local currency for where you're travelling.  This could be done a number of ways, including at a bank, a post office exchange rate, your hotel, or even by wire transfer from Moneygram or Western Union.  Check on money transfer companies for more information.

"Good" part of using Cash: No worries about acceptance.  You know the local currency will be accepted.  Convenience is king!

"Bad" part of using Cash: Watch out for overpriced currency exchange rates.  They can really eat up the value of your money during the transfer process.  It's also a risk when you have local currency left over when you're returning home.  Lastly, cash is just difficult to carry – at times it can be very bulky depending on the value of local currency from USD -> local currency.  

Travelers Checks

Easy to get, you can usually buy travelers checks in foreign currencies (especially if you're going to Europe, Canada, or Japan).  These are check drafts just like your check book, essentially prepaid and funded before you leave.  Pay as you go.

"Good" part of using Travelers Checks: Added security.  Most merchants want to see a form of ID, so you don't have as much to worry about getting these stolen like you do cash or a debit/prepaid card.  

"Bad" part of Travelers Checks: Fees can make this an expensive option, it still requires a currency exchange that is often set by the company and is expensive, and you have to go to the issuing company's location to exchange checks for currency if you need it — so logistics can be difficult.  Also, not all merchants will accept them!

Debit Cards

You can use your debit card while travelling remote and access funds as you need them, with the cash being converted automatically to the local currency.

"Good" part of Debit Cards: Cash as you need it, usually competitive exchange rates to local currency, direct access to your bank account at home with convenience.  Less chance of theft than cash.  

"Bad" part of Debit Cards: Not all ATMs will accept them, as it depends on the issuing bank and network — though most European, tier 1 Asian, and Australian or Canadian destinations work well.  If you're travelling on the road or in rural areas, you may have trouble finding a compliant ATM – this can be a big problem so plan ahead and get currency (from your Debit card) in advance.  Coordination in advance with your issuing bank is advised, both to let them know you'll be travelling overseas (or they could block your card or suspect fraud) and you may need a separate/new PIN.  

Credit Cards

Use your bank issued credit card for charges up to your standard credit line while travelling abroad.  Charges are done in local currency, conversions are done automatically, and you can use the same card you have now.

"Good" part of using Credit Cards: Easy to replace, less risk of theft vs. cash.  Assuming Visa/MasterCard is your card type you have excellent chances of acceptance when travelling abroad.  Cash advances are also an option if you're in an emergency.  Easy to carry & convenient.

"Bad" part of using Credit Cards: Fees can be high on overseas transactions.  In addition to currency exchange rates, set by the banks, they also will charge service fees per transaction.  Not all merchants will accept them.  Be careful with your credit cards as theft and security compliance is often less secure when used overseas (theft scams with merchants stealing your card #'s and quickly running charges before you can notice them).

Deciding Which From of Travel Money is Best For You

You'll most likely need to use several options.  In most cases, you're usually going to want to have at least some convenience cash in the local currency with you for incidentals and emergency (from a phone call to your hotel or other emergency situation where you don't want to worry about acceptance).  Pick the option you're most comfortable with, and use caution / safety if you're planning on needing to bring/pay for a large amount of purchases.

If you're travelling to less developed countries, you'll want to use extra caution and probably lean towards Travelers Checks.

Lastly, it's always advisable to try and pre-pay or at least pre-plan the large ticket items of your trip, which is usually your hotel and "plannable" accomodations.  If you can fund these payments in advance you'll have to worry less about extra overseas fees (especially if you're considering going Cash all the way).

Don't forget to leave enough time to convert funds back to Dollars on your last day — you'll likely pay another fee / lose on exchange rate conversion back to USD but it's better than bringing home local currency.  Try to keep your 'end amount' of cash to a minimal amount to reduce your 'exit costs' for your return trip.

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