Gone are the days of needing to use Travelers Cheques when traveling abroad! With the widespread acceptance of credit cards and worldwide ATM networks, dealing with foreign currency is easier than ever.
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1 | Get the right credit card.
Even if you usually don’t use credit cards, you should have one for traveling. Credit cards are easier to replace than cash, offer theft protection and often provide travel insurance. You’ll also get a better exchange rate on credit card purchases than cash exchanges.
Until recently, the biggest detraction to using credit cards when traveling abroad was the hefty foreign transaction fee levied by banks, but many companies have dropped this fee, especially on travel reward cards.
Europe has used Chip-enabled credit cards for over a decade, but they were only recently introduced in the United States. While you can use a non-Chip card in Europe, having a Chip card will make transactions easier. (European cards use Chip & PIN cards while US cards use Chip & Signature. This means you’ll still need to sign for purchases made with a US card.)
If you plan on traveling a lot in the upcoming years, I suggest getting a travel reward credit card that earns points with your preferred hotel or airline loyalty program or allows you to redeem points for travel expenses. Some cards even provide benefits like free checked bags or reimbursement for the cost of TSA Pre✓ or Global Entry. Reward cards usually have an annual fee (which is often waived the first year), so consider whether the benefits are worth it for your personal situation. Two of my favorite travel reward cards are Chase Sapphire Preferred and Starwood Preferred Guest by American Express.
2 | Have a plan for getting cash.
You’ll get the best exchange rate for cash through a bank ATM. (Don’t be fooled by the currency exchange ATM at airports, which offer a less favorable exchange rate.)
Before leaving home, find out if your bank belongs to a network that allows you to make fee-free withdrawals at partner banks. If so, find a branch close to your hotel, train station or airport so you can get cash soon after your arrival.
If you can’t find a way around a withdrawal fee, you should minimize the amount of withdraws you make. I usually try to take out at least a week’s work of cash in one withdrawal. (Most banks have a maximum amount you can withdraw in one transaction or within one day, so be sure to know your limit!)
Lastly, know your credit card PIN in case you need to take out a cash advance at an ATM. During a two-week trip to Ireland and England a few years ago, my bank’s network was unexpectedly down and I was unable to make a withdrawal from my checking account. Luckily, I was able to get a cash advance on my credit card. (I called my bank when I got home, and they refunded the cash advance fees and interest!)
Expert tip: I have a separate checking account that I only use for traveling. It’s a great way to sock away money throughout the year, and it keeps my standard checking account safe if my ATM card is stolen or lost while traveling.
3 | Share your travel plans with your bank and credit card companies.
You don’t want to get to the cash register just to have your credit card declined, so make sure you share your travel plans with your bank. Most companies have an online form where you list your travel dates and the countries you plan to visit.
Also, don’t forget that some places you visit are territories of other countries. One of my friends called her bank to let them know about her cruise around South America. They marked that she was visiting the Falkland Islands, but her credit card was declined at a shop there because the bank thought the charge was originating from the United Kingdom.
4 | Consider buying a travel wallet.
I usually travel with two wallets — one that stays in my hotel room safe, the other in my day bag.
One of my favorite travel wallets is the Baggalini Currency and Passport Organizer. With five pockets, it’s easy to find a place to stash everything. The large pocket is great for keeping your identification (including passport and driver’s license) while the side pockets let you organize credit cards, coins and bills. The pockets are also extremely helpful separating money from different countries.
In my day bag, I carry a small wristlet. I like that I can tether it to my bag by clipping the strap on a zipper tag or loop in my bag. This makes it harder for me to accidentally drop it or leave it behind…or for a pickpocket to remove it easily from my bag.
Extra tip: While American bills are all the same size, many countries’ bills are different dimensions based on the denomination. Some of these bills might be wider than US bills, which means they might not fit well in American wallets. (I unfortunately figured this out when I couldn’t close a wallet I’d bought specifically for my vacation!)
5 | Pay in the local currency.
Recently, I’ve noticed more stores and restaurants offer customers the option to pay in their home currency. A few times, a cashier has asked if I want to pay in dollars, but most of the time, I’ve received a prompt on the credit card machine asking me if I want to pay in dollars.
While you might think this is an easy way to avoid a foreign transaction fee, it’s not! First, you might still be charged a fee because the charge originated in a foreign country. Second, the exchange rate will be higher than your credit card’s.
6 | Keep your money secure.
As I mentioned earlier, I try to make a big cash withdrawal, but I don’t walk around with all that cash in my wallet! I go straight from the bank to my hotel and stash it away. I put the equivalent of around $40 in my wallet each day and leave the rest in my hotel room’s safe
Also, I like to take two credit cards with me. (This is especially helpful if one of your cards is an American Express, which isn’t as widely accepted as Visa and MasterCard). I pay for big purchases (like hotels, car rentals, etc.) with one and then secure it in the safe; the other, which I use for everyday purchases, stays in my wallet. This way, I have a backup if one gets lost, stolen or damaged.
I know some people still recommend hidden travel wallets, but I find them extremely uncomfortable. For a standard day of sightseeing in Europe, I’ve always felt secure by simply stay alert and take other precautions, like keeping my arm over my bag in front of me and turning it so zippers and openings face inwards against my body.
7 | Spend, donate or save leftover cash.
So, it’s the last day of your vacation, and you still have some cash left. Don’t worry! It’s always a good idea to set aside enough cash for hotel staff tips and snacks at the airport.
Also, if you’re planning to return to the same destination (or another country that uses the same currency), keep enough cash to tide you over for any purchases you might need to make between the airport or train station and the hotel (like ground transportation tickets or tips for a cab driver).
Lastly, consider donating your spare change to charity. My favorite hotel in London, Nadler Kensington, helps guests donate their remaining cash and coins to local charities. Many airlines also collect donations for their charity partners (e.g., British Airways and Comic Relief).