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Travelers Money - Cash Vs Plastic Vs Travelers Checks

What about Travelers Checks?

Traveler’s checks have been in steady decline for a few years, despite the overall increase in travel.  This has been caused by a number of factors, not least being the increased issuance of credit cards and debit cards, and the extent to which they are accepted abroad. Support for the use of cards and the undermining to Travelers Checks has been further eroded by the massive growth in the worldwide ATM network.  This is coupled with the perception (and fact) that TCs can be a pain to cash. Especially at weekends or if you run into local bank holidays (quite likely in Spain where there are local bank holidays!)

Cash and Travelers checks do have one big advantage for the budget conscious its much easier to keep track of what you’re spending especially if trying to keep to a daily budget!  Other good reasons to consider taking some travelers checks on your trip include:

  • If you only have one card
  • If you are traveling alone
  • If you are traveling in remote areas

If some or all of these apply think on this. The reality for most card issuers is not like the old ads – they will not be rushing you a new card within 24 hours. If you lose your card, have it stolen, the mag stripe and or pin has problems, then you have a problem if this is your only means of payment and getting cash. Your card could also get skimmed (i.e cloned) and then maxed out. If any of these things happen you possibly have a huge problem.

Here are a few tips to consider:

Never ever ever travel with only one means payment and a bit of cash.

Always have a back up and don't travel with it if possible. If it is not possible keep one/some on your person and one/some secreted in your luggage somewhere secure. This applies even if you are traveling with a partner – there is always the possibility of both being mugged. Wiring money from friends or relatives is expensive and fraught – especially if you and they have not done it before.

Don’t carry more plastic than you need at one time

Anyone who has lost a wallet or purse knows the heartache of having to run round canceling their credit cards. This is even more painful abroad. Take cards you won’t be using out of your wallet and leave them at home, in your room or hotel (hide them or put them in the safe). Other tips include:

  • Try and avoid running your cash down to the last cent/euro before getting more.
  • Always keep one large denomination note somewhere safe.
  • Don’t forget flights can be delayed on the way home as well as the way out – so don’t spend it till your confident it is safe to do so.
  • Relying on your airline or tour operator to provide you with emergency food and drink would be a fools paradise, as they only provide the bare minimum where there are substantial delays.

Know about Foreign Transaction Fees before you travel abroad

When it comes to taking credit cards overseas, it really pays to think about what credit card you are taking with you for several reasons.  One of the most important is how much your credit card company charges for each international credit card transaction.  Many travelers, especially those who are traveling for the first time overseas have no clue about this hidden charge and can add significantly to your travel costs if you're not careful.

Credit card companies call this a "Foreign Transaction Fee" or "International Transaction Fee" and you will find this lurking in the fine print on the contract you were issued when you first received your credit card.  Most major credit cards charge this fee which you will only see when you return home and read your credit card statement carefully.

In years past, a traveler would incur the fee (then called a foreign currency transaction fee) for any purchases made in foreign currency, to cover the cost of converting the transaction into U.S. dollars. Today, however, many credit card issuers have started charging this fee for all purchases that involve a foreign bank even if you use U.S. dollars or make purchases in American territory, such as the U.S. Virgin Islands.

Most credit card companies charge a 1% to 2% fee for using their card abroad, but then the issuing bank may charge additional fees on top of that, typically around 2% for a total fee of 3% or maybe even 4% for each transaction.

Internet transactions processed through overseas companies also result in foreign transaction fees. So if, via the Internet at home in the U.S., you charge a deposit for a Paris hotel on your credit card, your credit card issuer likely would charge you the transaction fee unless your card's terms dictate otherwise.

Two entities--your card issuer and either MasterCard or Visa--may charge you the fee. MasterCard and Visa's fee is 1 percent of the value in U.S. dollars of the purchase, and most banks using these companies to carry out the transactions tack on their own fees, usually 2 percent. Not only does Capital One not charge a fee, it also absorbs the the 1 percent that Visa and MasterCard charge.

One important point to consider in getting around foreign exchange fees is to use a debit card rather than a credit card. Debit cards usually (but not always) don't have exchange fees, and since they are usually part of the MasterCard or Visa networks, they can be just as convenient as credit cards.  Check with your issuing institution to confirm.

Credit cards with no transaction fee

Do some checking about this fee way before you take your international trip.  Call each of your credit card companies and ask if they charge this fee, and what percent it is - you may be surprised how many of your cards charge this fee.  Consider getting a new credit card that does not charge for international transactions fees, several companies offer this, you just have to do a little searching.

Is one credit card company better than another?

This is a loaded question, and you could go on for hours to explain all of the details.  One thing to consider is that many credit cards are issued by large institutions and will have very similar services they offer for international travelers.  Many exclusive cards have more international card usage benefits than free or low annual fee cards, but those are usually used by frequent international travelers.

What if your credit card is lost or stolen which traveling overseas - How long would it take to get a replacement card sent to you while traveling overseas?

All major credit card companies offer card replacement services - even when you're traveling out of the country. The international assistance number for your bank or card service can usually be found on the back of your card; make sure to write this down and keep it separate from the card itself, so you have the phone number available if you do lose your card.

In case your card does not have a customer service number for international calls on it, you can make a collect call directly to the credit card company at the following numbers:

MasterCard: (636) 722-7111      
Visa: (410) 581-9994      
American Express: (336) 393-1111      
Discover: (801) 902-3100

No matter how you contact the card issuer, these help lines are manned 24/7 by customer service representatives that have been specially trained to help you replace a lost or stolen credit card. Just keep in mind that the process may take a few days longer than it would inside the United States, particularly in rural areas.

You might also want to keep in mind that some travelers have commented that bank debit cards don't always have the best reputation about expediting replacement cards when traveling abroad.  Although Visa/MasterCard is accepted most in Europe, many travelers who have reported them stolen or lost overseas have also mentioned difficulty in getting them replaced quickly when traveling abroad.

One card to think about carrying abroad is an Amex card.    With American Express, if you are close to a major international city, Amex allows its customers to go to a local Amex agency and get a replacement card after 24 hours of reporting your loss.   A downside is that Amex is not taken at all locations in Europe, but if you were in a jam, at least you would be able to get a replacement card quickly to pay for hotel, air, train, and food costs.  Most travelers prefer to carry both cards - MasterCard/Visa and an American Express Card

The gap that may exist between a bank's policy and real life in getting a replacement credit/debit card is something that many travelers have learned the hard way

Replacing credit and debit (ATM) cards abroad (or even withing the US sometimes) can have certain obstacles that the traveler should consider before they leave on their trip.  It should be noted that each back that issues cards has their own policies that deal with the sending out of replacement cards - and these rules are not always the same.  Here are just a few to consider so you don't end up with a nasty surprise when you try to get an emergency card replacement.

  • It may be several days before you can get a replacement card; in some cases you may not be able to get one at all. It helps to learn your bank's emergency policies before leaving home.
  • One bank issuers policy is "to try to work with its members in quickly getting a replacement card," but when one traveler tried to do this, he was told she had to wait until he got back home for a replacement.  He did receive a new card, but it took two weeks.
  • For some travelers, reporting a lost or stolen credit card can be almost as exhausting than the theft of the card itself.  Some travelers have reported that when the loss occurred abroad, it could take up to an hour to deal with getting a replacement card.
  • Some travelers report that it has taken 7 to 10 days  to get a replacement card and for some, it could only be send to their home - not a good thing if your are abroad.
  • In one case a traveler had to wear down two supervisors on the phone before persuading them to send a new card to their foreign address. This bank's ''standard policy'' was to only send replacement A.T.M. cards only to the address on file for security reasons.  Some travelers have reported that some banks will work with customers in an emergency and send a new credit or A.T.M. card by express delivery - but don't always count on it.

Activating a replacement credit and debit card overseas can be a problem

Frustrating to some international travelers is that when they had received a replacement credit card overseas, the cards come with a sticker indicating that it had to be activated from a home telephone.  When the travelers called to explain that they were out of the country, the credit card company would not activate it.  Having someone who you can call at home to do this from your "home phone" may be something to consider.

Know your bank's replacement card policy

Can your bank mail you a replacement credit or ATM card immediately? Does it have branches or offices in the country where you'll be traveling? How about a local contact number? If not, how do you reach them? Always do a little research before you leave, either on your bank's web site or by asking when you alert the bank that you'll be traveling abroad. If you bank at a small credit union, you may have more difficulties getting a replacement card abroad than if you bank with a major banking institution, some with actually have many branch offices throughout the world.

Expect the best, prepare for the worst

Some of your preparation begins beforeyou leave home. You can't totally prevent a card from being stolen, but you can design a backup plan to make the replacement process as painless as possible.

Cash versus Card

Obviously it is unwise to go around carrying large amount of cash.  If you are not careful this will attract attention and increase your chance of being robbed. Having to dive into a money belt just draws attention to the fact your wearing one – so avoid this by carry ready money in a purse or wallet.

As you can tell, credit cards win out over cash on security grounds – and back up strategies for cards have been discussed. But when it comes to making purchases, and which one is the better route (pay by card, exchange money using your card, or get money from an ATM), this is much less clear cut and depends largely what type of plastic you pack.

Bear in mind if you use a credit card in a Bureau de Change (BDC) your card company will probably treat it as a cash advance and clobber you for interest and 1.5 to 2.5%, as well as any charges made by the BDC.

If you are given the option to pay by card but in sterling (or your native currency) there will probably be a hidden agenda, like the exchange rate you get will be very poor. This is called dynamic currency exchange as a rule always decline this offer.

These days most card companies charge you a % of the transaction if it (the purchase) is not in your native currency. This does vary widely. It started a few years as as a modest 0.75% and has been steadily climbing ever since as it not something most of us consider when choosing a card. It can now be up to a massive 2.75%.

When ever you carry valuables while traveling - including cash, credit cards, or travelers checks, consider carrying these items in travel safety wallet, purse and packs - all designed to keep your valuables safe from skilled pickpockets and sneak thieves.  To view a wide variety of the travel safe purses and bags, visit