How you are going to organize your money while you are on the road is a major decision that needs to be made before you leave for your trip. Some destinations are easy than others, while some have strict policies on how they like to be paid. We have broken this post down into two sections; countries where it is easy to use credit and debit facilities, and countries where it is not.
Credit/ debit countries
Most of the developed world (and some of the less developed) fit into this category. These are the types of countries where you will seldom have to carry large amounts of cash on you. These are the countries where if you need cash, you can easily access it from a bank machine.
It is in these countries, that traveling with some sort of credit or debit card is almost necessary.
I prefer to travel with a credit card. Luckily in Canada, we have a lot of great options for cards with no annual fee that can also earn you travel points. The trick here is also finding one that doesn’t charge you obnoxious foreign currency fees. This is why I never travel with my Australian credit card. It charges me a flat rate of $6 every time I use it in another country… and that can VERY quickly add up. With my Canadian credit card, I pay no foreign transaction fees, and the exchange rate it gives me is generally very competitive.
However there are some people out there that for whatever reason are either unable or unwilling to travel with a credit card. For you there is still an easy way to access your cash while abroad. It’s called a pre-paid credit card or cash passport. This is a card that acts like a credit card, but doesn’t actually give you credit. You have to put money on it in advance, so in effect it is sort of like a debit card – you can’t spend more than you have.
There are even pre-paid cards that are especially tailored for travel. One here in Australia is the Travel Money Oz Cash Passport. This card lets you reload the card in up to 10 different currencies, which allows you to fill up your card when the exchange rate is the most competitive for you. Whereas with a credit card you are tied to whatever the exchange rate is on the day you make the purchase.
There are many countries out there where you will not have many opportunities to use a credit card or cash passport. These are the countries with no (or few) ATMS. These are the countries where you will need to carry cash.
Of course, carrying large amounts of cash can be stressful and a money belt can be really annoying. Which is why you might consider travelers cheques. Travelers cheques can be annoying because you have to buy them in advance, and usually you have to buy them in US dollars as many countries will not accept travelers cheques in other currencies. This means that if you are not based in the US that you will get hit with two currency exchanges. Also when you do want to change them into money you will have to find a bank or other institution that accepts them. But they do have their advantages. You have to sign the cheque when you first purchase it and again when you cash it, which means if it is stolen the other person will have to be pretty good at forging a signature. The other advantage is that if they are lost of stolen you can have them cancelled.
Keeping your cash and travelers cheques secure is another thing you will need to consider as well. Money belts are annoying (and ugly), but there are some other unique products out there as well. One is the Clever Travel Companion which has pockets sewn into underwear and shirts, making it pretty difficult to be pick pocketed. You can see our review on that product here.