Travel Advice - Take a mix of cash and cash equivalents

When you leave for vacation, what blend of money and cash equivalents (principally credit cards, ATM cards,  and traveler's checks) should you take with you?   Considerations include

• The length of your vacation
• The type of vacation being planned
  • For example, will you stay at a resort where you can bill to an account?
  • Alternatively,  will you be moving between places and need to pay as you go?

Our preference is not to carry large sums of cash for reasons of safety.

Credit Cards

We attempt to use credit cards for all lodging, major meals, and events/attractions.

• Credit cards can be used for foreign currency transactions but this type of transaction is regarded as a cash advance or loan and interest starts at the time of the transaction.
• We recommend that you Do Not use credit cards for currency related needs.

We carry two credit cards with us during the trip but only use one at a time, keeping the other stored in a money belt until and unless it is needed.

• Taking two credit cards is not an attempt to stay within a credit balance but a strategy to be able to continue our vacation in case a card is lost, stolen, or damaged.
  • Note that dual credit cards issued on the same account do not provide as much safety as taking two cards from different accounts.
  •  If one card from a joint account is lost or stolen, both cards will be invalidated when you report the loss to the credit card issuer.

ATM Cards

We recommend using ATM/debit cards for currency transactions (e.g. to buy Pounds, Euros, etc. - see our article  Buying foreign currency). It is advisable to take  two ATM cards in case one is lost or damaged (see our article What To Do When the ATM  Eats Your Card).

You need to be prepared for locations where you cannot find an ATM machine or, perhaps an ATM that works with the financial network [Cirrus, Interlink, Plus, etc.] that supports your ATM card. In addition, you may find ATMs “out of service" for one reason or another.

• In these cases, cash is king.
• You are better off having local currency rather than dollars but any cash can be a savior (see Carry cash for convenience and emergencies).
  • So, be sure to have some cash to convert into local currency. It is a lifesaver when you cannot use your credit or ATM card.

Traveler's Checks

Traveler’s checks are useful cash equivalents but their value lies in their security rather than their flexibility.

• If you use a reputable check backed by readily available customer service, the traveler’s check is indispensable, since replacement is possible if the checks are lost or stolen (see Traveler Check Security).
• Most often, we find traveler checks useful for changing money and less welcome by vendors and hoteliers than advertisements suggest.
  •  Although we carry traveler checks for security, our traveler checks sit in our money belt and, often, make the return home without being converted. Their value is that they are present if needed.

The Blend/Money Mix

When leaving for a trip, we take ATM and credit cards for most of our financial transactions.

• Carry approximately one third of the amount of cash that you think that you will spend on your trip as 50% cash and 50% traveler checks.
• Use ATMs to transact  local currency.
• Use credit cards for most expenses incurred while traveling
• We recommend reserving the cash and travelers checks for use when there is no other alternative available.

Regardless of the money mix you plan to use during your travels, make sure you know the costs of doing so before you leave home.

• If you will use a credit card, find out the fees levied on international purchases.
• Ask about the maximum extent of the loss you are responsible for should the card be lost or stolen.
• For ATM cards, find out the cost of currency conversion and the cost of making a withdrawal at an “out of system” bank.
• These costs should not dissuade you from using credit cards or ATM cards but they will help you to understand and plan for the real cost of your transactions while traveling.

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