Credit card or cash? How you handle money on a trip depends a lot on where you are headed. While in rural Morocco, for example, you’ll only use a credit card a handful of times (if you are lucky). Most transactions are in actual local currency. On the other hand, I used my credit card pretty much throughout Norway last month, and cash was the exception to the rule. In either case, there are ways to wisely prep for a trip, mind your money, avoid unnecessary fees, and travel like a pro.
- Alert Your Credit Card Company: Let them know that you’re headed out of the country so purchases don’t trigger an alert within their fraud departments. I am notoriously bad at remembering to do this, and have suffered the consequences when my credit card suddenly gets declined at the register.
- Request a New Card: Most European countries use credit cards with a CHIP and PIN system to cut down on fraud. While the U.S. won’t switch over the same system until next year, you can request a card with the technology today. Make sure you know your PIN before using it. Without it, you can usually ask merchants to swipe it for you and sign instead, but some aren’t familiar with the issue and won’t know the process. Also, unmanned electronic ticket booths aren’t as flexible and will need a chip and pin to work. If you don’t have cash in that situation, you can either find a human to help you, or you are out of luck.
- Pack Back Up: If your primary credit card goes missing, or for some reason doesn’t work (see above), have an extra to use as a backup.
- Avoid Foreign Transaction Fees: Apply for a credit card (such as Capital One), that cuts you a break and doesn’t tack on 2-3% for the honor of using their card while abroad. I have one that I use just for trips for this purpose, which I pay off right when I get home so I don’t forget. Similarly, find out which, if any, ATM machines partner with your bank and let you withdrawal money without added fees.
- Get a Little Cash in Advance (Optional): I *sometimes* exchange a tiny bit of money in advance, just for peace of mind. There’s nothing worse than arriving at 6am, and realizing that the ATM is out of order or money, and you need to buy a train ticket or pay a taxi driver in cash to get to your hotel. Some banks or companies will do this in the U.S. without fees, so check in with your local bank, or American Express, and see what you can get before you leave.
- Do Use ATMs: Withdraw large amounts of cash at the ATM at the start of your trip, where you get better exchange rates. I always get more than I think I’ll need. This prevents a return trip to the ATM and any fees that come along with it. If you are worried about carrying large of amounts of cash on your person, consider a travel belt or some other such secret means to hide your money.
- Avoid Dynamic Currency Conversion (DCC): Some places offer to convert your purchase into U.S. currency for the transaction. While this is tempting (so you know exactly what you are spending right on the spot), DON’T DO IT. (Sorry for yelling.) You’ll get a really crappy exchange rate, and absolutely no benefit. Always, always choose to do business in the local currency, whether it’s in a store or at the ATM.
- Don't Use Currency Exchange Desks: Both credit cards and ATM machines offer better rates than the manned desks in the airport. Unless you are stuck without another options, you can skip on by.
- Skip the Traveler’s Checks: I haven’t used travel checks in years, but they are still an option. They just aren’t as good of a deal as credit cards or cash from the ATM. If you do, keep the check numbers and info separate from the actual checks, so if they are lost or stolen, you can easily get replacements.
- Don’t Reconvert Leftover Currency: As my return flight approaches, I start to get smarter about how I’m spending my remaining cash. If I have any left over on my final day, I either: a.) buy some chocolate for the flight home; b.) donate coins to UNICEF on the flight home; or c.) pay part of my final night’s hotel bill in cash before heading to the airport.
What travel tips have you learned over the years?