Cash, Credit Cards or Traveler’s Checks – A Guide to Handling Money Abroad

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There are a number of different ways to carry and to manage your money when you’re on the road. With the rise of internet banking (and the increasing ease of accessing the internet abroad), you’re never too far from knowing how much you have in the bank (making it easy to budget as you go).

Credit and debit card (also known as charge cards) are extremely useful to have while traveling, but most of the time you’ll need to have at least some cash on you (try paying a street vendor in Bangkok with a credit card!) Because of this, it’s best to have a mix of different payment methods (as you’ll soon see).


Whenever and wherever you’re traveling to, ALWAYS make sure you have some cash on you (in the local currency). Ideally you want AT LEAST enough to pay for a couple of day’s meals and accommodation. The reason for this is that in some countries (such as Laos) and remote regions, it is not possible to exchange traveler’s checks.

Keeping it Hidden
Obviously carrying cash is extremely risky (especially when carrying large amount), but in many cases it is necessary to at least carry some. When carrying cash it’s a good idea to keep it hidden from the eyes of the world. I prefer to carry a small amount in my wallet (for convenience) and the rest in a money pouch (such as a waist pouch), money belt or an under-the-shirt bag for safety.

It’s also worth noting that most travel insurance policies will have a limit on the amount of stolen cash they will compensate you for. It’s important to know this figure, so check your policy if you’re unsure.

Credit and Debit Cards

ATMAs well as cash, you’re going to need to take a credit (or debit) card. They’re great for emergencies, and they’re actually great for paying with when you’re abroad as they usually offer a better exchange rate than you’d get with changing cash over.

Credit or Debit?
Credit cards are better than debit cards, as they often provide travel insurance (on the money you’re withdrawing), and are more widely accepted. Visa, MasterCard and American Express (also referred to as ‘AMEX’) are the most widely accepted cards in most parts of the world.

It’s best to use your credit card sparingly, however, as you always want to have some money available on them as an ‘insurance policy’.

Paying them Off
It’s important to remember that even though you may be away from home, your credit card statements won’t stop, and you’ll be charged just the same for late payments. One way to avoid any nasty surprises is to pay a large amount into your credit card account before you leave.

If you can’t afford to do this, you might want to try setting up a standing order with your bank so that they transfer a set amount into your credit card account each month. I find this works best with people who travel for longer periods of time (6+ months).

While you can just pay your credit card off online manually, it’s easy to forget when you’re having the time of your life, so consider these methods as taking preventative action.

How to Avoid Overspending
Because it’s critical to always keep a ‘safe’ amount on your credit card (for emergencies), I recommend making a note every time you spend on it (with the date and how much you spent).

Traveler’s Checks

Whenever I go traveling to non-Western regions (such as South East Asia) I make sure to convert most of my money to traveler’s checks before I leave. So what are traveler’s checks (spelt ‘traveler’s cheques’ in the UK)? Basically, when you’re at home you exchange a certain amount of money for these pieces of paper, each with a unique serial number on them. Each piece of paper is worth a certain value (depending on how much money you traded in). You can trade these in for local currency in other countries (look for Western Union branches) and they can only be exchanged by you (as you need to show your ID to verify your identity).

They’re great because even if you lose them (or if they’re stolen), you aren’t losing any money (as you would if you were to carry cash around with you). The best way (I’ve found) to use them is to exchange one every few days (or every week) and to live off of that cash for that period of time. Then, when you’ve almost run out (or when you know you won’t be going past any exchange points for a while), exchange another one for some more cash.

This means that you’re never carry an excessive amount of money around with you, making it an incredibly safe and sensible way to travel.

While you could just use an ATM machine instead (which is a lot less hassle), some banks will charge you a hefty processing fee for using an ATM abroad. Even if your bank allows free overseas transactions, traveler’s checks are useful to have as a backup in case you lose your card.

General Money Tips

Before you buy traveler’s checks, get money changed over or take out a credit card especially for traveling, be sure to shop around to find the best deal.

Also, be sure to read the small print for any extra hidden costs. Some banks will tell you that their foreign exchange rates are the best, then charge you a hefty commission on each transfer.

The Cheapest Places to Get Money Converted

The cheapest place to get money converted is often in the country that you want to use it in. However, it’s a good idea to get a small amount changed over while you’re still at home, as you’ll probably need some to pay the taxi and for other small conveniences.

While the owner of the hotel you’re staying at might offer to exchange your money for you, local banks almost always give a more favourable exchange rate. If possible, avoid changing money at airports and border points (between different countries) as they also offer bad exchange rates (although they are convenient).

It’s also worth checking if there are and major holidays (when the banks will be closed) on the days you’re arriving on, as you may need to bring a bit more with you so you can pay your way until the banks open.

Notifying Your Bank
Before you go away (especially if you’re going to Asia, Africa or South America), tell your bank exactly where you’re going and how long for. If they see that your card has been used thousands of miles away from where you live, their natural instinct is to block the card from being used (in an attempt to stop you from being scammed).

They will then proceed to try and contact you to find out if you know your card is being used in another country. The problem with this, is that if you ARE away, it’s almost impossible for them to get in contact with you (as they need to do this in person or over the phone), and this verification process is necessary to get your card to work again.

It might also be a good idea to get a family member or your partner to act as your signatory while you’re gone (don’t take this appointment lightly, though). This will enable them to pay bills for you and many other exciting things.

Essential Phone Numbers – Don’t Leave Home Without Them
There are a few essential phone numbers that you should have written down before you leave for your trip. You’ll want the numbers to call if your card is stolen and if your traveler’s checks are stolen. It’s also highly recommended that you write down the numbers of each of your traveler’s checks (each one is given a unique number so that it can be identified).

Transferring Money While You’re Abroad

If you’re in desperately in need of some extra cash while abroad, and you don’t have a card to take some out on (or a friend who can lend you some), there are several services that you can use to get money transferred to you, which you can then pick up at a secure location.

When picking up money, you’ll need a valid photo ID, and you’ll also need to know the exact amount that was sent (and possibly a transfer ID number).

Western Union
western unionWestern Union should be your first port of call in such instances, as they offer a safe, reliable international money transfer service that’s also extremely fast. The best thing about them is that they have branches in almost every country in the world. I have used this service many times, and it really is ‘money in minutes’ (as they advertise it).

These transactions are easy to set up. All it takes is one phone call home from you to your parents (or someone else that’s willing to bail you out). They can then call Western Union and set up the transaction within just a few minutes. Alternatively, they can send the money online (from or they can go into a Western Union branch and send it directly from there.

The only real downside to using Western Union is the hefty commission they take on all transfers. In some cases it can be as much as 25%! For this reason, money transfers like this should only be used in emergencies, and should not be relied on any more than they have to be.

Another service that’s used by a lot of people is MoneyGram. They cover over 190 countries, and can transfer you up to £5000 in less than 10 minutes. As with Western Union, the size of the charge all depends on how much you transfer. For example, to transfer $1000 you would have to pay $60 in fees.

The Best Bank Accounts for Travelers

Unfortunately, there is no single ‘best’ bank account for traveling. The country that you live in and the current offers being promoted by your local banks will change what the ‘best’ bank for you is. There are, however, some things that you should look for in a bank account (when opening it with the intention of traveling in the near future):

  • Low (or zero) charges for withdrawing money from ATMs worldwide
  • A good internet banking set up (making it easy to manage your money from abroad). Most banks have this nowadays, but it’s always best to double check.
  • Avoid bank accounts that charge you a monthly fee for some kind of reward or privilege scheme. They are rarely worth the money (if you do the math), and will just eat into your budget.

In the UK, it seems that Nationwide is the best bank to open a ‘travel’ account with (at the time of writing). This is because they charge 0.84% on cash withdrawals (which is nominal compared to a lot of banks).

Opening an Account Abroad
If you’re planning on spending a fairly long period of time in one particular country, it might be worth opening a bank account there. Opening accounts in New Zealand and Australia is a very popular idea among travelers who are planning on spending at least a few months there.

It’s a great idea, and saves you having to carry lots of cash or traveler’s checks around with you. Unfortunately you can’t open such accounts from outside the country anymore, but you can open them easily enough once you get there (all it usually requires is for you to deposit a small amount into your account).

Having a bank account in another country also makes it far easier for people at home to send money to you, as they can send it straight to your bank. It also means you can transfer money from your bank (at home) into your new bank without any charges or fees (although be aware that such transactions can take a few days to process).

In Summary

As you can see, it’s good to use a mix of credit/debit cards and cash whilst traveling. Take the time to consider all of the options before you leave, as you’ll see the benefits of a carefully planned out money strategy while you’re away.

Related posts:

  1. How Much Money Should I Take On My Trip?

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