Using Money Abroad: Cash or Credit?

October 5, 2016

Finding the best way to use your money abroad is always a bit of a hassle. Fortunately, there are only a few options to choose from.


1. Convert all currency in cash with your local bank before you depart. Carry this with you abroad.
2. Get just enough cash to survive (either by changing at home or when you land), and use your credit cards for most transactions.
3. Withdraw local currency from an ATM when you arrive
4. Keep your money in traveler’s checks

When I traveled to Greece last year, my parents were particularly concerned I would die from starvation, unable to withdraw any cash due to the financial crisis at the time. Although I was mildly concerned I might not be able to use a few ATMs, being completely cut off from my money didn’t enter my head.

Although I have been unable to use ATMs abroad at times, the reasons are anything but the economic collapse of the country:

– Japan’s ATMs don’t operate late at night and during certain holidays
– My card wasn’t accepted in Germany because it had a six-digit PIN (only four was acceptable)
– My card was eaten in Italy after the machine didn’t stick it out far enough for me to grab it

Let’s talk about credit cards. Many cards, unless otherwise stated, will charge a 3% foreign transaction fee for each use. Those that don’t make shopping and eating abroad just like you charged something at home. However, this isn’t foolproof; many places will simply not accept foreign cards, period. China is more partial to UnionBank. New Zealand convenience stores and restaurants (with some exceptions) can only accept foreign debit cards, though they ring up as credit.

If you decide to use your debit card on your trip, you have a choice between withdrawing cash and just swiping where available. Many people prefer keeping a healthy supply of cash on them, and I can’t say I blame them; when you’re about to pay for a jeepney ride in the Philippines, you can’t exactly pull out your visa and expect to get where you’re going. Even more developed countries like Japan seldom accept credit at restaurants and entertainment venues.

If your bank is a member of the Global ATM Alliance, you’re fortunate enough to be able to withdraw cash for no fees instead of the typical few dollars on the receiving end and a few dollars on the home front (usually between $7-10 total). I’ve been able to take advantage of such service with Bank of America in the US, China Construction Bank in Shanghai, Scotiabank in Canada, BNP Paribas in France, and Westpac in New Zealand, to name a few. Because there are no additional fees other than the 3% foreign currency charge, there’s very little pressure to withdraw all the money you need for the entirety of your trip.

As for traveler’s checks, don’t bother. Maybe back in the 80s and 90s they might have been necessary to ensure you could replace your money if you got robbed or they were misplaced, but these days, it’s difficult to find retailers who will accept them, let alone banks that are accustomed to them.

What method do you prefer when it comes to spending money abroad?

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