Travel FAQ: How To Pay For Things Overseas & Other Travel Money Tips
This is part of a series on frequently-asked travel questions. This post goes into detail on a number of travel money tips, including how to get money internationally, dealing with local currency, money safety, and when to use credit cards vs. cash.
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How to get money internationally
The real answer is that neither cash nor credit is *better*, as it’s highly situational to where you’re going. There are a couple factors that can impact what makes the most sense.
- The most important one is to research ahead of time if your destination is one where credit cards are taken a lot (Scandinavia, for instance), or mostly cash (Jordan). This isn’t just at the country level, but can vary by region—for instance, in Scotland we easily used our credit cards in Edinburgh, but up in the more remote Highlands everyone wanted cash and ATMs were thin on the ground.
- The other main factor then is personal preference. If you have a good credit card and a good bank, you should pay roughly similar conversion fees (about 3%), though there can be an extra fee for using an ATM out of network depending on your bank. I prefer to use my credit card when possible, as I get good rewards points and have good fraud protection, plus it’s simpler since I don’t have to be nervous about carrying a ton of cash.
So, with that said, let’s talk about how to handle cash and credit cards individually while traveling, safety, and some other travel money tips to get you prepared.
How should I get cash in the local currency?
While there are a few ways to get money internationally, my short answer is use ATMs with your debit card to get cash. This will give you the closest to market value on the current exchange rate. Then you’ll pay a transaction (conversion) fee—3% for any good bank—and you’ll usually pay an ATM fee of $3-5 (unless you have the type of bank account that waives them).
As much as possible, try to use ATMs that are part of a legit bank. If you have a fairly large national bank normally, call them ahead of time and ask if they have any foreign bank partnerships. For instance, I know from past experience that Bank of America is part of a network that includes BNP Paribas (France), BNL d’Italia (Italy), Deutsche Bank (Germany), and many more. This has saved me quite a bit on ATM fees.
Avoid generic ATMs when possible, as well as Forex (foreign exchange) machines. And I recommend avoiding currency exchange desks unless it is truly your last resort…you’ll generally get the worst rate and most fees this way.
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Should I convert money ahead of time?
You’ll find different opinions on this, but generally my answer is no.
Some people always do because it gives them peace of mind, but it’s also a hassle and not as easy as it once was. Many banks don’t bother, and for those that do you’ll need to request it with quite a bit of lead time.
However, if you need a significant amount of money in the local currency (like a thousand dollars or more) right away then it would be wise to look into ordering and exchanging ahead of time.
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How do I pay with my credit card internationally?
This is my preference when possible, because it’s quite easy and the rewards stack up. This also keeps me from having to fumble with cash constantly and makes me less susceptible to “return change” scams (where you don’t get the correct amount of change back when paying with a larger bill).
Many places (throughout Europe at least) switched to “chip and pin” cards years ago for security. Unfortunately the U.S. still hasn’t moved that way for the most part, so our cards are largely “chip and signature”. This adds a little extra hassle at times (having to physically sign the receipt) but still works fine.
It is traditional in most parts of the world for a waiter or attendant to bring the credit card machine to you, rather than your credit card ever leaving your sight. If the machine tries to make you enter a PIN and your card doesn’t have one, just hit “Enter” again and it bypasses.
If you’re planning to use your credit card for a lot of payment, I always recommend having one primary and one backup card, just in case something goes wrong…this has happened to me before, where a card is declined or just refuses to work in an automated ticket machine. A backup can be a life saver.
Related: Travel FAQ – Things You Might Not Know About Your Credit Card
Considerations for choosing a credit card for travel
- No foreign transaction fees – this is a MUST! You’ll still pay a roughly 3% conversion fee but nothing extra.
- High value points that are easy to redeem, or good cash back offering
- Good perks, and in particular rental car insurance coverage and travel insurance coverage
I’ve had the Chase Sapphire for years and love it. Many people rave about the Capital One Venture as well. Do some research on what credit cards are best for travel, it is worth the time and effort. One tip: don’t rely solely on an American Express…I’ve run into countries where almost no one will accept them.
But even if you’re going to a place where credit cards are fairly widely accepted, you definitely still need at least a little cash on hand. Sometimes the card machines don’t work (or ticket machines, lookin’ at you, Florence), or you need to pay some cash upfront at a small hotel, or there’s a minimum amount for using a credit card…whatever the reason, you need some cash. And honestly it’s more polite to pay for small purchases (like a cappuccino in Italy) in cash.
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Should I pay in USD (or your home currency) on a credit card vs. local currency?
Sometimes when you’re paying by credit card and are presented with the machine to finish the transaction, you’ll be asked whether you want to be charged in USD (or whatever your home currency is) or the local currency. Almost all of the time it’s best to use the local currency.
The reason is that, if you choose the local currency, your credit card will use their exchange rate at that exact time (and generally the most aggressive rate). If you choose USD, however, the restaurant or store will use whatever *theirs* is…and that’s not updated as often. There’s not normally a big difference, though there sometimes can be…but even with a small difference (say, 5 cents) it will add up on a bigger purchase.
Let’s use a tangible example: Say you find a necklace you love at a shop in Paris, that’s listed at 65 EUR. When you’re paying on the credit card reader, it asks if you want to pay 65 EUR or $73.45 USD. While that doesn’t sound bad (“sounds about right”), the actual value that day would have been $70.85 at a 1.09 exchange rate rather than $73.45 at a 1.13 exchange rate. It’s not a ton, but it’s an unnecessary extra cost and can add up over the course of a trip.
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Safety with money: travel tips
I feel like this goes without saying, but always let your bank and credit card companies know where you’re going, so they don’t reject your debit or credit cards. Most banks and credit card companies will let you set travel notifications online without having to even call someone.
Similarly, always write down or take a photo of the front and back of your credit and debit cards before leaving. Having a record of all the important info (including the collect phone numbers for customer service) can save you a ton of time and hassle if your cards get declined—or stolen.
Always be on your guard when using an ATM, as they can be vulnerable to scams as well. Carefully protect your PIN number when getting out cash (including covering your hand while you type it), and pay close attention to the ATM…here are some good tips for being aware of ATM scams.
As I mention above, always get at least some local currency, and ideally in smaller bills. Try not to keep all your cash in one place, particularly if you are carrying a higher amount. I always keep a few smaller bills in easy-to-grab places like various purse pockets or pants pockets. This way I don’t have to dig my whole wallet out every time I want to grab a coffee (which shows would-be pickpockets where you’re keeping it).
Hopefully these detailed travel money tips will help you feel more prepared and confident as you plan your next awesome trip. Hit me up in the comments if you have any questions or additional tips as well!
Other trip planning resources to help you out:
- 11 of My Best Tips for ANY Trip
- How to Find the Right Flight…Every Single Time
- How to Choose the Right Hotel or Rental Every Time
- Tips for Putting Together Epic (& Feasible) Itineraries
- 20+ Tips to Survive & Thrive on a Long Flight
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