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Cash, Debit and Credit Cards – A Balancing Act When Traveling

Cash Is No Longer King

I think we all ask ourselves the same age old question just before we travel – “Exactly how much cash will I need to carry for this trip? And if I don’t use cash, is it safe to travel with my credit card?”

Credit-Card-Travel

I still remember years ago when I would go to the bank, withdraw hundreds of dollars, then divide it up into smaller amounts and hide it in different parts of my luggage, carry-on, and wallet. I also remember constantly forgetting exactly where I hid the money and going through some intense moments of panic, thinking I had somehow lost it or had it stolen. I was always in a state of constant worry where my money was concerned.  I though – what if someone were to rob me and run off with my entire suitcase? What would I do for the rest of the trip with no money? Luckily to date I have never been robbed on a trip and I hope it remains that way.

Another inconvenience of carrying around Canadian dollars is that every couple of days I had to go to a bank to get my dollars changed to the local currency. Naturally banks close in the afternoons, on holidays, and on weekends, so I would have to plan my bank visits to avoid being stuck without money. Fortunately a lot has changed in the past 10 years. I have devised a much more convenient, safe and sensible money management system when I travel.

Paying with Plastic

The availability of and accessibility to ATM (cash) machines has drastically improved around the world. In just about every little town across Central and South America I was able to find an ATM where I could withdraw the local currency. Sometimes I ended up at a finicky machine that refused to accept my bank card and that posed a bit of a problem. However,  luckily there is usually more than one machine in every town.

Nowadays I carry about $200 to get me started on my trip and the rest of money I withdraw at an ATM when I start running low. Of course doing withdrawals does come at a cost. My bank charges me a flat fee of about a $6 for every international withdrawal I do. This can begin to add up when you are on a longer trip depending on the number of withdrawals you have to make.  However, I think that paying that fee to worry less about having all of your money stolen is a no brainer. Be sure to check with your bank to confirm how much they charge for international transactions as this fee varies by bank.

TIP: Remember to call your bank to notify them of where you will be traveling to. I have had my cards automatically flagged and blocked by my bank when I tried to use them in other countries. They block the cards when they see usage that looks suspicious. It can be very frustrating when you try to withdrawal money and no machine seems to accept your card. Don’t panic, contact your bank and have them lift the block. They do this for your own protection.

The Perks of Plastic

In addition to my bankcard, I always travel with my credit card. I also book all of my flights online using my credit card because I am automatically covered for 2 weeks travel insurance when I use it to pay for my ticket.

Now you can also pay for most hotels online with your credit card. This means that you don’t need carry around cash for accommodation like you did in the past. With a bit of planning you can book and pay for your flights, hotels, buses and excursions with your credit card before leaving for your trip. Not only do benefit from having to carry a lot less cash, but you can also spend more time enjoying your vacation instead of worrying about finding accommodation and transportation when you are abroad.

Other than convenience, paying for most of your trip with a credit card also two other very big benefits.

1) Tracking your spending

At the beginning or end of your trip you can know exactly how much you will or have spent on most things other than food, entertainment and souvenirs. You will have a record of all the transactions on your next credit card statement or in real-time with online banking.

2) POINTS

If you don’t have one already, get a card that gives you some sort travel related points that you can use to buy future plane tickets or pay for hotels. My card gives me one point for every dollar that I spend. I have already used these points to book 3 flights in the past 3 years. It’s almost like getting free flights just for paying with your card instead of cash. If you have the cash in your bank account, pay with your credit card and pay back the amount you spent the very same day. That way you don’t end up paying any interest and you get the points for making a payment you would have made anyways.

 

 

 

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