In an earlier article, we discussed some of the difficulties American travelers face when trying to use their credit cards abroad:
- Most international merchants only accept EMV cards — not the magstripe cards that are so popular in the U.S.
- Even if you have an EMV card, some international merchants only accept locally issued plastic.
- Some foreign merchants don't take credit cards at all. They operate cash-only businesses.
Although credit cards are useful in many situations, you can't always count on them.
Fortunately, cash is accepted everywhere. As long as you have enough local currency, you'll be able to buy mostly anything you want. This is the primary benefit of paper money; and except for a little haggling here and there, cash is a relatively hassle-free medium of exchange.
However, there are some drawbacks of using cash abroad. Before boarding the plane, it's important to understand these disadvantages — and how best to address them.
1. You Lose Money on Every Conversion
Every time you change currencies, you lose value. This is especially true at airport and train kiosks. They tend to have some of the least competitive exchange rates.
The best way to avoid these losses is to:
- Change some money before you go. You'll be able to shop around for better rates.
- Once abroad, rely on your credit card as much as possible. Your next best option is to use ATMs (but not always — as you’ll soon see).
2. Most ATMs Charge You Twice
When withdrawing money from an ATM not linked to your bank, you often end up paying two fees – one to your bank and one to the ATM’s bank.
However, there are a handful of debit cards that don't charge withdrawal fees — even when using an ATM machine out of the network.
3. Money Is Easy to Lose
If you lose your credit card or it gets stolen, the remedy is simple: Just contact your bank to have that card canceled. Some issuers even provide liability coverage to protect you from unauthorized purchases.
When your cash is stolen or lost, it's gone forever. Your bank probably won't reimburse a dime, but there are several steps that could reduce the likelihood of losing your money:
- Use a traveler’s belt that keeps your cash close to your body — and under your clothes.
- Don't leave money in your hotel room unless it is a reputable establishment that provides safes.
- Whenever possible, withdraw or exchange the smallest denominations you can. If you pull out big denominations during a transaction, this could attract unwanted attention.
- If traveling alone, keep your money and credit card separate. In case you lose one, but hopefully not either.
- If traveling with others, split your money so that there is always a backup stash.
Want More Tips for Traveling with Cash?
Despite the above drawbacks, it’s very difficult to travel without relying on a little bit of cash. However, by using the above tips, hopefully your trip will be as enjoyable as possible.
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