Do You Really Need Money When You Travel Abroad?

05/19/2015 01:43 pm ET | Updated May 19, 2016

When you're planning a trip abroad, you need to create a list of essentials to bring with you. Seasonal clothing, toiletries and your passport will always make the cut, as will your printed itinerary, a camera and things like extra batteries and phone chargers.

But another essential travel item seems to stump those who travel abroad, and especially those who travel to certain destinations. We all know you need to bring money on vacation, but what kind? Also, what currency? And is a credit card a sufficient replacement for paper money?

What kind of currency should you bring abroad?
When it comes to choosing which form of payment to bring overseas, the truth is, you will most likely be better off bringing a combination of paper money and cards. Here's what you should plan to bring, as well as some pros and cons for each.


When you're traveling abroad, cash is king -- especially during the first 24 hours of your trip. When you first arrive in your new destination, you may need cash to pay train fare, catch a cab or grab a bite to eat. The good news is foreign currency should be readily available at your local bank or at the airport before your departure. If you want to be safe, you should probably exchange the equivalent of what you expect to spend the first few days.

Pro: Cash is accepted almost anywhere.

Con: Exchanging currencies can result in a net loss of funds due to currency exchange rates and transaction fees.

ATM and debit cards

Almost everywhere you go these days, ATMs are available. At any bank's ATM, you can use your ATM card to get cash in the local currency, provided you have that money in your bank account. Meanwhile, debit cards are a decent option if you want the money for your overseas purchases deducted directly from your checking account.

Pro: ATMs are easy to find almost anywhere you travel.

Con: Debit cards may work like credit cards, but they don't come with the same protections. According to the Federal Trade Commission, your total liability for fraudulent debit card purchases reported within two days is limited to $50, but your liability climbs up to $500 if you don't report within two business days. After 60 days, the amount of money you could be liable for is unlimited.

Credit cards

With credit cards becoming the preferred method of payment across the globe, it makes sense to bring a credit card abroad -- and to use it for most of your overseas transactions. Due to beefed up fraud protection and the zero liability policies many credit cards offer, you can usually use your credit card anywhere in the world without worrying about someone getting a hold of your credit card number. To make sure your credit card will be accepted, opt for one of the newer cards with chip-and-PIN technology before you travel overseas. Instead of a chip-and-signature, these new cards use a combination of an embedded microchip and a personal numeric code to authorize transactions. Many merchants will still take cards with a magnetic stripe, but not all.

Pro: Credit cards are a widely accepted form of payment that is easy to use and carry. Most cards offer zero liability for fraudulent purchases, but according to the FTC, the most you can be legally liable for is $50.

Con: Some credit cards charge a foreign transaction fee for all transactions made overseas, typically somewhere between 3 and 5 percent. To avoid paying the extra expense, use a card that doesn't charge these fees for overseas travel.

How should you prepare your wallet?
So, do you really need money when you travel overseas? Of course you do. But the payment methods you choose to bring along and how much of each is up to you. In most cases, the best method to prepare financially for an overseas trip is to bring a little of all of the above -- some cash in the foreign currency, your standard ATM card and a few chip-and-PIN credit cards that do not charge foreign transaction fees.

One more tip: Before you leave on your international trip, call the banks associated with each card you plan to bring and provide them with your travel dates and destinations. Doing so will (hopefully) prevent them from shutting down or freezing your accounts when they see you start making purchases outside of your country of residence.

Making all of these decisions and phone calls ahead of time should make your trip a simpler and much more enjoyable experience. Because no matter what, you don't want to wind up across the globe with no money and a wallet full of cards you can't use.

About the author: Holly Johnson is the founder of travel website, Travel Blue Book, which covers travel experiences ranging from cruising to fine dining. Holly also writes about frugal living, travel and budgeting on her other website, Club Thrifty, and at Get Rich Slowly, Frugal Travel Guy, Personal Capital and many other online publications.