4 Ways to Travel with Foreign Currency

You’ve saved up, found the perfect deal and booked time off for your dream vacation. But have you decided how you’re going to pay for everything while you’re abroad? There are many payment options for travellers today. Before you head to the airport, consider these four ways to handle foreign currency:

Cash

Benefits

  • Convenience – it’s accepted everywhere
  • Wait for a good rate and purchase all currency before you depart
  • Manage your spending because you can only spend what you have with you

Trade-offs

  • When you lose it, it’s gone
  • Exchanging cash currency is costly if you have to do it at local merchants, hotels or foreign exchange counters
  • It can be problematic to carry large amounts of cash across borders
  • It can make you a target for crime

Debit & Credit Cards

Benefits

  • Exchange currency at a better rate than what’s available at local shops, the resort or the airport
  • Safer than hard cash – you can get a replacement card if lost or stolen

Trade-offs

  • May pay additional fees on each transaction
  • May interfere with pre-authorized debits if forgotten about while away
  • Reliant on accessibility – check that Interac or banks are available where you’re going and have a backup plan

Traveller’s Cheques

Benefits

  • Manage your spending because you can only spend what you have with you
  • Replace easily if lost or stolen

Trade-offs

  • Slower transactions
  • Exchanging cheques for local currency can be pricey and difficult – it’s getting more difficult to find places that will exchange traveller’s cheques

Pre-Paid Credit Cards

Benefits

  • Exchange currency at a better rate than what’s available at local shops, the resort or the airport
  • Manage your spending – you can only spend the balance on the card
  • Replace easily if lost or stolen
  • Use at local ATMs for cash advances
  • Does not interfere with pre-authorized debits on personal accounts
  • Faster transactions than traveller’s cheques

Trade-offs

  • Reliant on accessibility – check that Interac or banks are available where you’re going

In recent years, there has been a large consumer shift toward using pre-paid credit cards. However, there are still benefits to each of these methods of payment as you travel. The important thing is that you do some research before you purchase or use foreign currency to make sure you save wherever possible – additional fees can add up very quickly.

Check the exchange rates as you plan so you can have a rough idea of how much you’ll need. This is a good basis for determining what method of payment you’ll lean toward in your travels, but always remember to keep in mind three key rules:

  1. Don’t spend more than you earn
  2. Protect yourself against loss
  3. Watch out for high exchange rates while you’re abroad

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2 Responses to 4 Ways to Travel with Foreign Currency

  1. R Kevin Luty says:

    I am taking a trip in October for a month, and I have not travelled anywhere out of country for about 15 years. This quick read has helped me to decide what I would feel most comfortable with doing, while I am away. I still have 3 months to decide what choice to make as final, but this is useful general information.

  2. B Philip says:

    My daughter lost her debit card in New Zealand a couple of years ago. It is NOT as easy as you might think to replace it.