The Best Way to Travel with Money (and Tips on Using Money Abroad)

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What’s the best way to travel with money? I’m glad you asked.

If you’re new to traveling abroad, dealing with currency exchange can seem a bit overwhelming. What type of currency do you need? Where should you exchange your money? How much should you take? It can all be a bit stressful.

Don’t fret. We’re here to help! We’ve made dozens of trips across Europe and the Caribbean, and we’ve definitely learned a lot about handling money overseas. By following these tips, you can learn from our mistakes, save money on fees, and relax knowing that your money situation is taken care of. So, let’s get started!

Traveling with Money: Where are You Going?

Before we talk about the best way to travel with money, it’s important to talk about where you’re going. The location of your travel has a big impact on how you’re going to handle your money abroad. Each area handles money differently, and it’s important to know what you’re dealing with before you get there.

For instance, if you’re traveling to the Caribbean, you probably don’t need to worry about exchanging money at all. Most travel destinations in the Caribbean are happy to accept USD as a form of payment. So, instead of converting a a bunch of cash to the local currency, just bring a stack of USD with you. Of course, it’s always a good idea to bring smaller bills, especially if you’re leaving tips at an all-inclusive. That way, you’re not stuck with $100 bills you can’t spend.

On the other hand, if you’re traveling to Europe, you’ll definitely need to change your money into the local currency. Unlike countries in the Caribbean, Europeans will simply scoff at your attempt to use USD. So, unless you plan to exchange those dollars at a currency exchange (see why you shouldn’t below), those dead presidents hold roughly the same value as a roll of toilet paper.

Many European countries use the Euro as their currency. However, certain places – like the United Kingdom, Switzerland, and others – still use their own. Before you leave, know which currency is used in the countries you plan to visit. Then, decide how you can get your hands on it without paying a fortune in fees.

Best Way to Travel with Money: Use Your Card

When it comes to taking money abroad, there’s no contest for the best way to do it: Use your credit cards whenever possible. Not only are credit cards more convenient, they’re likely “safer” than carrying around a bunch of cash. And, if you happen to lose your card, you’re not out a bunch of money.

Of course, you can’t just take any ol’ card with you. Make sure you’ve brought along a card that doesn’t charge for foreign transaction fees! This saves you money by eliminating foreign transaction fees, eliminating currency exchange fees, and by getting you the best/current exchange rate when you go to pay. (More on that in a bit!) You can find our favorite travel cards here!

Preparing Your Money to Travel

Before heading to the airport, it’s important that you take some steps to ensure everything is working properly, including:

  1. Alert your bank. – Even though using a credit card is generally best practice, you’ll still need some cash. (I like to get cash at a local ATM upon arrival.) Before leaving the country, it’s important to alert your bank that you’ll be traveling. Simply call your bank and let them know where you’re going and when. They’ll put a travel alert on your bank account so you’re not stuck getting a “denied” message at a foreign ATM machine. If it sounds like I’m talking from experience, it’s because I am.
  2. Alert your credit card company. – Just like your bank, be sure to alert your credit card company (or companies) that you’ll be traveling. Even if you bank with the same company who issues the credit card, you must alert both departments. Again, you don’t want to be trying to pay for dinner and get denied.
  3. Carry a credit card that doesn’t charge for foreign transactions. – As I mentioned above, it’s important to bring a credit card without foreign transaction fees. Typically, non-travel credit cards charge around 3% per purchase for foreign transaction fees. So, for every $1,000 you spend, you waste about $30 in fees. That’s not a ton of money, but it adds up quickly. Skip them all-together by using good travel cards without foreign transaction fees.
  4. Bring a backup credit card. – It’s always a good idea to bring a second credit card, just in case something goes wrong. Perhaps your card doesn’t work, you lose it, or it gets compromised while you’re there. Having a second card makes this a minor inconvenience instead of a major issue. Again, it’s best to bring a card without foreign transaction fees as your backup. Like with your primary card, be sure to alert your credit card company that you are traveling.

Other Tips for Using Money Abroad

What's the best way to travel with money? Learn our favorite way to carry money while traveling, plus discover some other tips for handling money abroad!I’ve been doing this long enough that I’ve made plenty of money mistakes while traveling. Here are a few more tips to help you avoid some common errors:

  • Understand the exchange rate. – Before you go, be sure to check the exchange rate. When paying in Euros (or Pounds), it’s easy to think you’re paying less than you actually are. However, depending on the current exchange rate, a €20 item may actually cost $22 or a £100 meal may actually equal $150. Add this up over the course of your trip, and you could easily blow your budget without realizing it.
  • When given the option, pay in the local currency. – When using a credit card, some merchants may offer you the option of paying in USD. Don’t do it. You’ll almost always get a better exchange rate if you pay in the local currency.
  • Use ATM machines, not money exchange centers. – Avoid using the money exchange centers you see at airports and in popular tourist areas. These businesses typically charge higher fees and offer worse rates. Instead, use your ATM card to simply withdraw money once you get there. You’ll almost always get a better exchange rate, saving you money right off the bat. (Remember to call your bank before you leave home!!!)
  • Carry USD for emergencies. – With respect to the above, it’s still a good idea to bring some USD with you. (I usually bring a couple hundred dollars.) In an emergency, you can always hit the money exchange and trade your USD for the local currency. It may cost you more, but at least you’ll have it.
  • Always carry some cash in the local currency. – Although the best way to travel with money is using a card, it’s always a good idea to have some cash in the local currency on you. Some places are more card friendly than others, but – even in those destinations – you’ll still find merchants that are “cash only.” Smaller denominations are typically better.
  • Take out only what you’ll need. – Don’t take out too much cash. Withdrawing too much local currency isn’t just a pain to exchange, you’ll also take a double whacking in currency exchange fees – both when you take it out and when you exchange it back to USD.

Handling Money Abroad: Final Thoughts

Before traveling, not knowing how to deal with money can be stressful. Having money problems while on your trip can send you straight into panic city. Lord knows I’ve made my fair share of money mistakes abroad, and while you can’t plan for every eventuality, I’ve learned that preparing ahead of time can save you tons of headaches.

I hope you’ve found these travel and money tips helpful! I’m happy to answer any questions you have in the comments below. Thanks again for reading, and – until next time – happy traveling!

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  1. Mrs. Picky Pincher says:

    I agree: I think traveling with a card is the easiest thing to do. I always carry local cash AND USD with me for emergencies, but cards are so much more convenient. In places like Europe you’ll look like a total tourist if you try to use cash. It’s best to use cards and blend in (pssst–you can get better prices if you look like a local!).

  2. I give these tips to my students as well when I take them on study tours. However, they always forget. I have to bring extra currency because I basically become the ATM. Maybe I should start charging an extra fee for doing so.

  3. Travelling in the eurozone is sooooooo much easier now with the euro. I remember travelling in the past and ending up with coins from all sorts of currencies. I think I still have some Dutch guilder and German marks somewhere. So much easier having just one currency for all those countries.

  4. Get an app that will do currency conversion. There are tons of them. Yeah, you think you can do the conversion in your head, but sometimes your jet lagged or have had a few drinks.

    See if one of your accounts will waive/refund ATM fees. I got a Fidelity ATM card tied to my money market account that refunds all ATM fees.

  5. Credit card is the best travel companion as long as you’re able to control your spending. I would also find it very necessary to bring extra cash when card terminals won’t work all of a sudden.

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