We all know how to handle our money at home -- which vendors take cards, virtual wallets and which only accept cash. We understand the value of the amounts we see on price tags. We recognize the bills and coins we carry and can quickly select the correct one. We choose sensible and irresponsible spending decisions with that understanding. We don't have that same understanding and comfort when we need to deal with foreign currency. Fumbling around to select the right bill or coin can hold up a line of other customers and hurt our confidence. We worry that we might be over-charged or cheated. We aren't sure how to thwart pickpockets. Questions from newbie travellers about handling money safely and wisely while abroad are common. Let's look at some ways to manage money before, during, and after your trip.
Before the Trip
Do Some Research
Many countries are turning more and more to electronic and card payments but there are still many that are more cash-reliant. Smaller businesses, especially in less-developed and more rural destinations often operate on a cash-only basis. Take some time to google the situation in your destination.
Credit cards are widely accepted in the most popular tourist areas however, which cards are more widely accepted varies widely. Before planning to rely on your credit card, do a google search to determine if your card is accepted broadly. Your credit card company may need to be notified of your travel to avoid fraud alerts that may freeze your card.
It's important to understand the terms of your credit card to determine foreign transaction fees and the terms of any travel insurance that may be included with your card. These are service fees charged on top of the exchange rate. Make sure that you have plenty of credit available on credit cards. Pre-approvals for hotels, tours, excursions, and fuel stations are temporarily applied against the balance. Pay off the balance, if possible, before travel.
Debit Cards and Multi-Currency Cards
If you planning on using your debit card to withdraw cash at your destination check with your bank to see if there are overseas branches or partner institutions that won't charge additional fees. Do a google search to if there are ATMs where you are travelling. I once stayed in a tiny Peruvian town with only one ATM -- and that was out of service for the entire week. Quickly becoming popular with frequent travellers are multi-currency cards that work like debit cards. Users preload their account with different funds bought at low conversion rates. These cards can be used anywhere that debit cards are accepted.
Electronic Wallets Electronic wallets, like Apple or Google Pay. are still not accepted in all places (yet) but are often found in unexpected small shops, markets, and kiosks.
It's always useful to have some cash while travelling, even in countries that use cards extensively. Most foreign currency can be ordered from your bank or at a currency exchange office. Your bank will usually offer favourable rates but may need a week or longer to order the bills. Not all banks will bring in all currencies. Currency exchange businesses usually have the currency on hand but charge more. Compare the exchange and transaction fees to determine your best rates. Be aware of any local laws or regulations that may affect how you can use foreign currency. For example, many countries have restrictions on the amount or types of currency that you can bring in or take out of the country. Make digital copies of all your important bank and credit card information and store files on your cloud, google drive or similar online storage system. Include your account numbers and contact phone numbers for your financial institution and credit card provider.
The most accurate way to do currency conversions is to use an app or Google. When conversions are more challenging, many travellers create strategies to help with quick on-the-spot calculations for those times when an app may not work or when reluctant to pull out a phone. Some of the strategies include creating a chart of basic conversions. An example might include $100 (€100) = "X" foreign currency. Others fold bills together in set value amounts. It's a good idea to have several strategies ready.
During your trip
Cboose the Payment Method
It's always a good idea to be able to choose your preferred method of payment by having several options. Some businesses will offer discounts for cash, others may prefer cards. Some businesses only accept cards with chips. It is not uncommon to be presented the PIN pad with an option to instantly convert the transaction into your home currency. Using this option often costs more than completing the transaction in the local currency. Complete your transaction in the local currency and let your financial institution set the rate.
It takes some time to become familiar with unfamiliar bills and coins. Bills are usually pretty easy to figure out with recognizable numbers. Coins can be much more challenging with their different shapes and materials -- and difficult-to-read values. I usually spend only bills my first couple of days while I learn to recognize the coins. If I need to use coins for tolls, ticket machines or the like, I get the coins ready before approaching. Don't get flustered, take the time you need. Separate your daily cash from the rest, leaving a small amount in your wallet. Even better, put your daily cash in a change purse separate from your cards. Secure the rest of the cash in a different location.
Be Alert for Pickpockets
The overwhelmingly most common crime committed against tourists is pickpocketing and snatch & grab thefts. Keep cash to a minimum and keep valuables close to your body and spread between several different pockets, backpacks, or waist belts. Close all zippers. Make your valuables more of a challenge than the tourists around you. Never place your valuables in easy-to-reach outer pockets.
Be selective about which ATMs you choose when making withdrawals. Avoid ATMs in convenient shopping areas or in any area that doesn't feel safe. Look for ATMs attached to banks, post offices, or other public buildings. Be aware of people around you and be discreet when entering your code
Learn the tipping culture
In Asia, tipping is not the norm and is often considered disrespectful in Japan. In Europe, most restaurants will note on their menus that service is included or that a service charge will be added. Otherwise, tipping is modest and reserved for outstanding service. In North America, tips of 15-20% are expected in restaurants.
Haggle Prices, if Appropriate
There are many destinations where haggling over prices is part of the experience. One of my favourite memories is an afternoon spent in a Marrakesh carpet shop drinking mint tea and negotiating on several items. Typically, due to a lack of price stickers or signs, you will need to engage with the seller. The shopkeeper will give an inflated price, the customer will offer less. Start by offering 50% less and move your price upwards in reasonable amounts. Eventually, you will arrive at a number that makes both of you happy. Don't be afraid to ask for their best price to start negotiations and by offering the payment method of their choice. Be prepared to walk away -- that often moves the negotiation in your favour, but please keep in mind that an extra dollar or two may not mean a lot to you but it may mean the world to the vendor.
Even in cultures where haggling is expected, there are establishments with fixed prices. Those that don't negotiate have clearly displayed price stickers. If there is no indication of prices, you can be almost certain that negotiation is expected.
Know the exchange rate
Whichever method of payment you choose, you need to understand what that means to your budget by ensuring you understand that amount in your home currency. Every traveller has paid more than they thought because they either forgot to convert or had faulty math skills at least once (and if we're honest, probably more). A good general rule is to round up high on all numbers to cover any additional fees.
Spend Your Cash
Unless you are returning to the same area soon, try to spend all your cash before returning home. Exchanging the cash back to your home currency will result in more costs. Coins can not be exchanged. Most airports and airlines will collect coins and bills of any currency for various worthy causes.
After the Trip
Watch your Credit Card Bills
It can take several bill cycles before all the charges come in from your trip. Scrutinize your statements for any unfamiliar charges. If you find a problem, report it to your card provider immediately.
Start Saving for the Next Trip
There's always another trip on the list. Make budgeting easier by setting up a dedicated account that receives regular automated deposits.
Handling money confidently while travelling is a skill that takes practice and preparation. By being prepared and following some simple tips, handling money while travelling doesn't need to be intimidating nor a source of constant anxiety. Take time to make sure you understand the value of the money you are negotiating or spending. Use sensible strategies for keeping your money and cards safe and you'll soon be wondering why you were worried at all.
Thanks for meandering with me! How do you handle money when travelling? Tell us your tips in the comments below. Share the link with a travelling friend, or to support the blog's growth. Become a member (subscriber) to get notified of new content, access to our members' forum, and a monthly newsletter.