A Matter of Spending During International Travel
While there are multiple ways to pay while you are abroad, not all methods are accepted equally. Just because your local gas station will accept your credit card without any problems doesn’t mean you’ll get the same liberties when you cross over a border. Let’s explore the three key methods of paying while you’re abroad – cash, credit, and travelers cheques – and the pros and cons of trying to pay with each.
Paying with Cash
The nice thing about paying with cash is the fact that, no matter where you go, the local currency will always be accepted. And, for the most part, currency local to your destination is usually easy to get, either at your local bank or at the airport en route to your destination. If you plan to use the local currency on your travels, remember that many other countries use more coins than Americans. This means that, after the first day, you could find yourself weighed down very quickly. Keep in mind that where you exchange money matters as well. Buying currency from an airport kiosk or an ATM could add on hidden fees, not giving you the full value of your dollar while you travel abroad. Additionally, carrying a conspicuous amount of cash on your person could also make you a target for theft. While accepted universally, be very careful if cash is your primary means of budget while traveling.
Paying with Credit
If you’re uncomfortable carrying large amounts of cash while you travel, using a credit card while you travel could be an easy way to pay while you’re on the go.
Credit cards issued through one of the four major networks (Visa, Mastercard, American Express or Discover) are almost universally accepted, and provide valuable benefits for the traveler. These include limited liability for fraudulent purchases made with your card, and valuable points and miles on each spend.
But spending with credit cards abroad can come with downsides as well. First off, when traveling outside the United States, many automated kiosks (like train stations and ATMs) may not accept cards without an EMV chip embedded. Even with a chip embedded on your card, you may need a PIN to use your card at a kiosk. Click here for a list of EMV chip cards available to Americans. While credit cards seem like a very convenient option, make sure that your card doesn’t charge an international transaction fee. International transaction fees can add a percentage on top of any currency conversion fees, which can add up very quickly with each swipe. And while you do have limited liability on fraud using a credit card, the threat of identity theft is still very relevant – especially in developing countries.
Travelers cheques are arguably the most secure way to pay when traveling internationally. When purchased, cheques need to be counter-signed in the presence of a bank teller, and then signed once again at the point of purchase. Every travelers cheque comes with it’s own serial number, assuring that if stolen, the cheques can be cancelled and replaced. This makes it easy to carry travelers cheques with a lesser fear of having them lost or stolen.
Though there are multiple levels of security that comes with using a cheque, they can be quite difficult to use. For instance, many merchants may be hesitant to accept them for a number of reasons – including misuse and fraud. While the best use of a travelers cheque is to exchange them for currency, this can be difficult based on the local norms and customs of the banks. In Spain, for example, banking hours are shorter, and long lines can take valuable hours away from your trip.
Every option provides a different set of opportunities and challenges when it comes to paying securely while traveling internationally. By knowing the pros and cons of each option, you can make sure you’re getting the best value wherever you go.