There are many options for traveling with money. Undoubtedly, the safest and most cost-effective is to choose a digital transfer service or a multi-currency account to keep your finances safe. But with multiple options from credit and debit cards, traveler’s checks, exchange services, and carrying physical cash, it pays to have a plan so you don’t end up suddenly over budget, or not having enough cash available when you need it!
So what is the best way to travel with money overseas? In this article, we’ll run through your options, along with the pros and cons of each.
Traveling Overseas with a Multi-Currency Account
For frequent travelers or business people with interests overseas, a multi-currency account or foreign currency account is almost always the most secure and cost-effective option. These accounts can be maintained by your local US branch or through an online digital service, like Cashero, and that means you’ll have no issues accessing funds abroad.
The big bonus is that your account won’t be subject to exchange rates, so you won’t need to keep rate fluctuations in mind, or risk that your finances will significantly drop in value when you come to make a withdrawal.
Using a Credit or Debit Card to Draw Cash Abroad
Many people want to know what’s the best way to travel with money overseas and assume they’re best off taking their regular credit card or debit card. The problem is that the typical fee structures charged on foreign currency withdrawals on credit and debit accounts can be high, and there are usually multiple additional fees to be aware of including:
- Transactions in currencies outside of US dollars are possible, but your bank will charge a conversion fee and a transaction cost — usually around 2-3% of the value.
- Cash withdrawal fees at ATMs are also expensive. Charges range from around 2% to 5% or even higher, and there’s often a minimum charge per withdrawal, even if the value is low.
- Exchange rate mark-ups mean that credit card providers will normally apply a mid-market range, plus their own bonus. This means you have no control over the exchange rates you are paying.
If you use a debit card, you may not be aware of the value withdrawn until you access your following statement. For credit cards, interest charges will start to accumulate from your next statement date, so added to all of the transaction fees, using a credit card abroad can end up being extremely expensive.
There are also a few barriers to using your bank card overseas:
- Foreign businesses may not accept cards without chips, and they typically cannot be used at an ATM.
- Not all cards are accepted in all countries, so even if you’re happy with the charges, you might have a hard time finding a bank that will take them and you may not be able to pay for goods in person.
These complications mean that using a digital wallet, money transfer service, or multi-currency account is cheaper and a lot less stressful when you want to travel overseas with money!
Can I Just Take Cash With Me When Traveling Overseas?
You can take cash with you, but there are a few things to keep in mind. First, there are limits to the amount of cash you can take when entering or leaving the US. That limit is $10,000 and includes any form of money, including traveler’s checks, and money orders. You must declare any cash over this threshold at customs and may need to go through further inspections before being permitted to travel.
In addition, each country has its own limits on the amount of cash you can travel with, so you will likely need to make a separate declaration on arrival, along with any paperwork, identity checks, luggage inspections, or investigations deemed necessary by border control. These regulations mean that many travelers avoid carrying a large amount of cash with them — even if there is a justifiable reason for requiring it. Limits apply to all parties in a group, so where a larger family or group of friends are traveling together, they will need to check the total value of the cash they are carrying and declare this to customs.
As we’ve explored above, there are far more convenient options that avoid causing delays to your travel plans and even potential prosecution if you fail to make a declaration correctly. Travel cards, borderless account cards, prepaid cards, and multi-currency accounts are far more efficient and will not require any declarations at the border.
Is a Prepayment Card Safe to Use Overseas?
Generally yes, prepaid cards are a safer option if you want to avoid using your usual bank account when traveling and don’t want to fly with large amounts of cash on your person. You can typically use these cards to pay for goods or withdraw cash in the allocated currency up to the limit you have transferred onto the prepayment account.
However, there are two core reasons why a multi-currency account or borderless card might be preferable:
- Limitations. You can load most prepaid cards in US dollars, Euros, or Sterling, sometimes along with other major currencies. You can’t usually change this, and so if you’re traveling across borders or will need alternative currencies on your trips, your card may not work in some destinations. Alternatively, the card might work but be subject to exchange rates and processing fees set by the provider, which you cannot control and may be very steep.
- Safety risks. If your prepayment card is stolen or replicated, you can usually contact the provider to put a stop on the account and avoid your funds being drained. However, if you aren’t aware that your card or wallet has gone missing, there is often little you can do to recoup the lost funds. Card theft is prevalent in many countries and common in popular tourist areas, so this is a serious risk to consider if your entire travel budget is stored on one card.
The benefit of a digital account, or one with a borderless card, is that nobody but you can access your funds. Notifications indicating transactions are delivered instantly to your mobile, so you can immediately contact your account provider should something crop up that you don’t recognize, and it’s easy to monitor your account balance.
That’s why it’s often best to combine having cash with a multi-currency account. You can then carry a bit of cash when you travel, to cover your basic daily expenses upon arrival, but then have a dedicated multi-currency account, like Cashero’s, for all other expenses on your trip.
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