Traveling with money requires a lot of thought, to ensure a great and safe experience abroad. So, what’s the safest way to travel with money when going on a trip abroad? Cash? Prepaid debit card? Traveler’s checks? Perhaps a bit of each? The safest way to travel with money is ultimately the one you decide meets your needs. This often means ease of use, low fees, and security. Carrying a combination of cash and cards has traditionally been thought to offer the best overall benefits. But with the growth of personal multi-currency accounts, you may find having one offers you the best combination of both convenience and security. This guide will provide further information to help compare plastic, paper, and electronic payment options and show you the smartest ways to travel with money.
Major Concerns When Traveling with Money
When going on a trip abroad, three primary concerns apply irrespective of the way you pay for purchases or services:
- Fees
- Convenience
- Safety
Addressing all three with a single payment method is challenging, if possible at all. If you choose to take a debit card, you ensure ease of use and convenience. At the same time though, it is vulnerable to theft, which makes it a rather dangerous payment option, with a high-headache potential. And no one wants to deal with that during their holiday.
Credit cards, on the other hand, protect your personal account. However, it is critical to use one which offers favorable fees. Failing to do so may cost you in forgein-transaction fees.
As for travelers’ checks and changing cash into foreign currencies, the first option is used by few people nowadays, while the latter can be expensive. Carrying cash also has the highest risk for loss by theft or misplacement. So, what do you do?
None of these choices seem to provide a single, easy solution. But there is a newer option becoming more readily available: A personal multi-currency account, such as Cashero’s, the details of which we’ll explore further on.
Let’s take a look closer at the given options below, with their pros and cons to help you make a better informed decision.
1. Credit Cards
Taking a credit card along has commonly been thought to be a solid way to travel with money, as long as you pick the right one. For starters, a credit card protects your bank balance from theft. You don’t have this with a debit card. Plus, some services or items can only be paid with a credit card when abroad (i.e. car rental services).
Depending on the type of credit card you use, you may also get extra travel-related benefits, such as zero foreign currency transaction fees, rewards points, travel insurance, and more. To know what fees your credit or debit card charges for international travels (both ATM usage and foreign transactions), contact your card issuer before you start using it abroad.
2. Cash
The budgetary advantage is the biggest benefit of carrying cash when traveling abroad. It is easy to obtain and use cash. Not to mention the fact that you always know exactly how much money you have spent and how much you have left. This comes as a pleasant surprise when considering how easy it is to lose track of your spending on a debit or credit card, especially when currency exchange math is involved.
On the flip side, the risk of theft or loss is particularly high, making it one of the least safest ways to travel with money. That aside, the only thing you need to do is exchange your home currency for the local currency. In this case, though, ensure you do not leave things for the last minute to prevent overpaying for it.
When exchanging currency, it’s best to avoid exchange kiosks in popular tourist areas and at the airport. The exchange margin (the difference between the rate at which a currency exchange sells currency and the rate at which it buys it) in these locations often carry a significant markup .
If you decide to take cash with you when traveling abroad, consider the following:
· Using a dummy wallet, as it makes you less vulnerable to pick-pockets.
· Splitting the money up between travel companions.
· Leaving most of your cash in a safe in your hotel room.
· Favoring on-body storage.
It is now becoming more commonplace that cash payments are not accepted, such as in parts of Europe or Asia, where all payments are done electronically. This can be an unexpected headache for travelers who are used to paying only in cash. These changes, along with the high risk of theft or loss, make carrying cash one of the least safe ways to travel with money.
3. Debit Cards
Debit cards are another popular option. You can often pay directly with a debit card while abroad, or use it to withdraw the local currency from an ATM. If you choose an ATM to withdraw cash in a foreign currency, beware of applicable fees, as many banks charge their customers for using ATMs while abroad, along with a currency exchange mark-up fee. The best way to tackle this hurdle and minimize transaction fees is to withdraw in larger sums.
Two risks you take when using a debit card while abroad, is that of losing it, or getting your card information stolen by a card swiper. This can put you at the risk of losing funds, but most banks now offer fraud protection to their customers. Often it is best to take out the cash you need, then leave your debit card behind in your hotel or place of residence.
4. Traveler’s Checks
Another way to budget money when traveling abroad is traveler’s checks. Like cash, they can be used to make purchases. However, you won’t be able to pay for many services or items using traveler’s checks (unlike cash). The good thing about them, though, is that you can replace them if they get stolen or lost. Nevertheless, travelers checks are not that popular nowadays. In years past however, they enabled travelers to carry cash-like funds, while providing protection similar to that of a credit card.
Nevertheless, although you can still use traveler’s checks when traveling, you will need to cash them at a currency exchange kiosk or bank before you can use them.
5. Prepaid Cards
Prepaid cards have come to replace traveler’s checks. Unfortunately, they bring higher fees than their paper counterparts. However, they do bring convenience to the table (the one of paying with plastic) while also eliminating the risk of exposing your bank account details to theft. You can easily reload a prepaid card either over the phone, or from the company’s site. Note that prepaid cards may feature hefty fees, which is why they may not be the cheapest way to spend your money when traveling to other countries.
6. Multi-Currency Accounts and Wallets
A relatively new option for travelers has begun making an appearance on the scene. That is personal multi-currency accounts and digital wallets, like Cashero. These accounts allow you to hold multiple currencies in a single account, thereby forgoing the need for worrying about exchange rates, transaction fees, and offer the convenience of cash, without the risk. With Cashero you can convert your local currency and hold USD, GBP, or EUR.
Providers of such accounts may offer differing ways in which you can access your funds while traveling, so you’ll need to research the specific details. Because of the tech-stack behind such accounts, transactions are often instantaneous and carry no fees. Plus, because you may already be holding the local currency, you can forego worrying about getting a good exchange rate. While these types of accounts are relatively new, they offer the best option for traveling with money abroad, and overall provide a solution to the issues raised with other options.
Final Thoughts
Traveling with money can prove challenging, as most options highlighted here come with their own advantages and drawbacks. However, with the advent of personal multi-currency accounts, travelers can have the ease of use offered by cash, and the security offered by electronic cards. So explore what options are available to you, including Cashero. If you decide to go the old fashioned way, you may need to take a combination of cash and cards, both debit and credit, to make your life easy. Use your credit card to pay for things like big ticket purchases and restaurant expenses. Your debit card can enable you to withdraw cash from an ATM, but do be mindful of fees. Don’t forget to create a budget before setting off, so you can ensure a secure and stress-free travel experience.
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As of the date of publication, the information contained on this page is deemed to be factually accurate for all terms of conditions, features, and fees. Changes made to Cashero’s terms of conditions, features, or fees after the publication of this content may not be accounted for.
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