Congratulations! If you’re reading this you’ve more than likely made the decision to go outside your home country, and experience another culture and way of life. I do this about four to five times a year – and all it requires is five hours in a car to Canada. But later this year, I’m hoping to finally get out of my comfort zone entirely and make it out to Europe again. Because frankly, I very much miss Europe.
So outside of my routine planning – where I’ll be staying, what to see, preparing for trip delay, etc., I’m also looking towards another equally sensitive issue. Once I get to where I’m going, I’ve got the distinctive problem of having to spend money once I’m there. It’s not the worst problem to have, by any means. But it does make me wonder where and how I’m going to get the best value while I’m abroad.
After looking into several different options on how to spend my money while not in my home country (in this case, the United States), below is my rationale when traveling to another country. When it comes to spending my money abroad, there is one surefire answer…with many other options available to me if I need them:
(Local) Cash is King
Ask any small business and they will tell you they would much rather have cash rather than process credit cards. Why? Processing a credit card incurs a fee for the merchant, meaning they don’t get all of the $20 you just spent with them. Plus, not all places may accept credit or debit cards – meaning cash guarantees you can get what you want when you want it. While cash is more susceptible to loss (by theft or otherwise), it does serve as the most direct way to purchase the products you want. I always recommend carrying a small sum of local cash wherever you go (at least $100), just in case you need it. If you’re not comfortable carrying more than that, there are alternatives you can consider.
Travel with a Travelers Cheque
While Travelers Cheques have been in decline since the turn of the millennium, they still remain available for purchase in many banks across the United States. The great thing about carrying Travelers Cheques are the fact that they are available in several currencies (including Canadian Dollars, British Pounds Sterling, Euros, and Japanese Yen), and are more secure than carrying cash. If lost or stolen, all one has to do is call the local number for replacement of cheques. However, because of their decline or lack of use, Travelers Cheques may not necessarily be accepted by merchants and would have to be taken to banks for processing and trading. If you don’t mind the inconvenience, this could be a great way to set (and keep) a budget while traveling. But for those who don’t want the hassle, another alternative could be…
Credit Cards are your Friend
So, you’ve decided you’re going to go with credit cards. This can be a very easy choice that requires little more than having an internationally recognized and valid credit card (like Visa, Mastercard, or American Express). The good news: with a credit card you get the flexibility of cash and a level of security in case your card gets lost or stolen. The bad news: most will charge you a fee for using it abroad – which generally hover around 3%. Even with “no international fee” cards, you may still have at least a 1% service charge from the card payment system. Not to mention the conversion rate of the day. Still, if you don’t mind paying the additional fee, this could be a very easy way for you to pay while you’re abroad.
Personally, I carry a combination of some cash and a no international fee points-earning card. I use the cash for small transactions (day events, cab fare, tips, etc.) and my card for larger transactions (gifts, expensive meals, and the lot). By doing both, I’m able to keep flexible on my ability to spend, while having access to money wherever (and whenever) I need it.
How do you make your spending work while traveling abroad? Let me know in the comments below – I’d really like to hear your tips!