Is it Better to Travel with Cash or Card?

Traveling to a new place can be exhilarating, but also intimidating. You’ve most likely spent a good chunk of change (not to mention time) preparing for your trip, from , to , to . After that, you’ll also need to spend a bit more time thinking through how you’ll handle expenses while abroad, and whether to use cash or credit card when traveling. Trust us: The best time to start thinking about money is before you’re spending it!

Time to do some budgeting and calculations!

Just a few of the additional costs of travel to keep in mind before, during, and after your trip include exchange rates, foreign transaction fees, and ATM fees. All that considered, you’ll need to decide for yourself whether it’s better to use cash or credit cards when traveling.

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Is it better to travel with cash or card?

Okay, let’s get right down to it. Is is better to travel with a credit/debit card or local cash? Lots of people think it’s better to take cash out of local ATMs when you arrive at your destination, in order to save on exchange fees and credit card fees. On the flipside, others prefer using a credit card while traveling because it can be more reliable and earn you points on your account.

So, is one better than the other? It depends. When deciding to travel with cash or card abroad, consider the following pros and cons:

Pros and cons of using a credit card abroad

• Pro: May offer a better exchange rate than when using cash
• Pro: If lost or stolen, a card is easier to replace and potentially get your money back
• Pro: More secure than carrying cash
• Pro: Score points on credits that can be used for future travel and other purchases
• Con: If you forget to alert your bank, your charges could be flagged as fraudulent (and they may shut off your card, leaving you stranded)
• Con: You may be charged international transaction fees on every purchase

Pros and cons of using cash while traveling

• Pro: Avoid international transaction fees on your purchases
• Pro: You’ll always have money available for tips or cash-only vendors
• Pro: It supports the local economy more directly
• Pro: You can order local currency in advance from your bank or organizations like AAA
• Con: Less secure than carrying a card (lost or stolen cash is most likely gone forever)
• Con: ATM fees and account fees for cash withdrawls abroad can be huge, especially at out-of-network ATMs
• Con: Difficult to know how much you’ll need, potentially leaving you stranded if ATMs or Western Union are scarce

READ MORE: 5 Best Credit Cards for Travel Rewards

Is it cheaper to use credit cards or cash abroad?

Whether cash or credit is cheaper comes down to exchange rates and transaction fees.

Since many of the pros of using cash or card depend on exchange rates, you’ll want to first understand what they are and how they can determine if it’s cheaper to use credit cards or cash during your travels.

For those who aren’t familiar, “the value of one currency for the purpose of conversion to another.” Anywhere you travel that doesn’t use the same currency you use at home, you’ll need to convert money so you can spend it.

In some countries, you’ll be able to use your own currency which the vendor then exchanges, but it’s best to take the “when in Rome” attitude, and make the exchange yourself at a kiosk, hotel, or other reputed place of business that offers exchange services.

Keep in mind that exchange rates vary by location. For example, airport kiosks don’t often have the best rates, so it’s a good idea to shop around or go to a local bank instead. It’s very easy to Google what a good rate would be.

Additionally, when you use a credit card, you must also keep in mind exchange rates. Some cards may have better rates than others (this information is also searchable).

This brings us to international and foreign transaction fees! Even with a good exchange rate, you’ll often be charged a foreign transaction fee when making credit card purchases abroad. Luckily, some credit card companies have partnerships with banks abroad, and offer lower (or zero) fees, especially credit cards intended for travel.

It’s best to do some research prior to your trip to see which of your credit cards is better to use (or if this time around you should stick to cash)!

Pro tip: Some vendors will ask you if you want to pay in local or foreign currency when you’re making a credit card purchase. It’s best to select local currency, as that will get you the closest to the fair market rate!

What’s the best way to get cash when traveling abroad?

Be sure to research how easy it is to find an ATM in your destination.

Most likely the easiest way to get cash when traveling is by using the same debit card you’d use at home at a local ATM. Just as with credit card foreign transaction fees, when you use your debit card to take out cash at the ATM, you may be charged a fee. Usually, it’s $2 to $7 dollars on any cash withdrawal.

That being said, it’s better to withdraw a large amount of cash at once to avoid multiple fees. The percentage charged by your bank on international withdrawals is most likely fixed, so by making larger withdrawals, you’re actually getting more bang for your buck where ATM fees are concerned.

Avoid scams by going to an actual bank to withdraw funds. Make sure you’re checking that you’re not being charged an exorbitant fee to withdraw your cash, and there isn’t a large minimum amount (you don’t want to carry too much money around with you with the risk that it will be lost or stolen).

Again, your bank may have a partner in the country you’re traveling to where you can withdraw cash with no fee, so try to find out if this is the case prior to jetsetting!

Another reason to get in touch with your bank prior to leaving your home country is to avoid the hassle of them potentially flagging any of your international purchases as fraudulent. Some banks will flag an international transaction until you verify you are indeed out of the country, which may delay being able to use your cards.

Honestly, it’s a great idea to pre-order some cash in the local currency through a travel agency (like AAA) to make sure you have a backup method of payment, at least for your first day or two abroad—. No phone service and no cash on hand will leave you stressed AF, especially if you’re landing in the middle of the night.

If for any reason you are not able to use a credit card abroad, other options include prepaid cards from Visa, Mastercard, or other large credit card companies, or even travelers’ checks. While it’s not ideal to carry around large amounts of cash, travelers’ checks can be refunded if lost or stolen.

Should I carry local cash when traveling?

It’s always a good idea to have some local cash on hand.

While credit cards are easy to carry and more secure than cash, you should always have some local cash on you when traveling. It’s just good sense. Besides the fact that some local shops and vendors won’t accept credit cards, having some cash provides a safety net in case your bank shuts off your card for any reason. Plus, cash tips are always more appreciated than digital.

How much cash should I travel with?

How much cash you should travel with largely depends on your destination: How much is the cost of living? Is tipping expected? How long will you be staying? Do many of the activities you want to do or places where you want to do business accept credit cards or online booking?

These are all questions you should ask yourself when determining to use cash or card when traveling, and just how much cash you should travel with. But, if you want a number to work with, we suggest having $200 on hand when you land in your destination, just to be safe. If you decide to go cash-only for your entire trip abroad, then maybe factor in a bit more for your first few weeks.

Keep in mind you’ll also want a safe place to keep your cash. Take with you what you need for the day, perhaps in a money belt or other secure item, and leave the rest in your accommodation, ideally locked up. Most hostels and hotels around the world provide safes or lockboxes in their rooms, so you’ll be golden.

Cash or credit card? It’s up to you!

So, should you use cash or credit cards when traveling? A mix of both may be the answer! If you do a bit of research prior to your trip, you’ll be able to safely estimate how much cash you should bring with you, how much and where to withdraw, and what your bank and credit card company’s policies are regarding international expenditures.

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