Save. Spend. Splurge.

Travel Series: Should you use cash, credit, or travelers checks when you travel abroad to get the best exchange rate?

There are many schools of thought on this so I’ll briefly go over them and give you what I know (feel free to add more information / correct me!)


1. Using Travelers Cheques Abroad

No one I know uses this so I can’t really speak on this, but they’re just as good as cash… which makes me think: Why not just bring cash?

I have personally never used travelers checks, so this one is a *ehh?*, grey, murky area for me.

2. Using a Credit Card Abroad

My brother who is also a big-time traveler (for work), is a fan of using the credit card for 3 main reasons:

  1. The points REALLY add up when you’re spending $$$ in hotels, flights, food, etc
  2. Convenience — You don’t need to get cash, exchange it, etc
  3. Security — To some extent he is right, if there is a charge that is wrong on the card, you can dispute it but…

… I am a much bigger fan of cash when I travel.

Aside from my brother and me, my entire family has had their credit card information stolen every. single. time. they travel abroad.

My mom always comes back wailing:

They had to cancel my credit card again!

Someone tried to charge a rhinestone-encrusted rhino [or some ridiculous item] at some store on my card in [insert country she just visited]!!

Not only for the fact that your credit card information can be more readily stolen abroad (thieves are wilier/smarter, especially in Europe), it costs MONEY to use your card.

The very rare times I have ever used my credit card abroad (mostly to pay for hotels), I have been charged the (highest) rates of currency exchange and then another “foreign exchange” service fee on top of it all.

It kind of annoys me.


3. Using Cash Abroad

This is considered the least secure of all three, but it’s my preferred form of paying for anything.

I also like it because it forces me to set a budget ahead of time, and if I run out of cash, too bad. I run out of cash.

Here are some ways I make this work:


I tend to bring U.S. dollars when I travel because they are the #1 most accepted currency in the world. They will take USD, ANYWHERE.

Canadian dollars are not that bad and neither are euros or pounds, but USD seems to be the most easily recognized and used among travelers.


I don’t exchange my money before I travel except for a small amount like $20 or so, so that when I arrive in the country I am able to at least take the subway / train to get to the hotel and to the main parts of the city before I hunt down a currency exchange booth.

I do this for 3 main reasons:

1. Sometimes it’s a pain in the ass because banks have to order in the currency (e.g. RMB or Chinese yuan)

I remember when we traveled to China, only because we were unsure if we would be able to find a currency exchange booth as easily as in other countries (e.g. anywhere in Europe), we exchanged money ahead of time, knowing we’d be in the country for at least a month.

The bank took 3 weeks to order in the RMB because they simply don’t stock it.

Our actual stack of money we exchanged when we went to China


2. I feel like it is not the best exchange rate because you’re exchanging money in a country that doesn’t use it

I am of the logic that if you want to buy pounds, the best place to buy it would be in the country that actually uses it no?

Otherwise, buying pounds here in Canada would mean they have to order it in ($$), and then charge you the currency exchange rate ($$). I feel like there are a little too many fees in between.

Of course you could say the same thing about my exchanging CAD into USD before traveling, but I know that if the exchange rate of CAD to USD is lousy, I just bring CAD.

Otherwise, if I exchange USD it is never a loss or a problem for me because I can always re-deposit it back into my bank account and buy USD investments.

3. I exchange only as much as I need, whereas if I exchanged a lot beforehand, I’m locked into spending it all

If I exchange a certain number of euros, I am locked into using them.

Sure, I can use them on my trip back the next time but I’d rather not keep foreign currency in cash when it could be in CAD or USD, sitting in my bank account and invested in index funds or something.

I only exchange as much as I think I need, so if I see something I like, I do the conversion of USD to Euros (as an example), and only exchange the amount I need to spend each time.


I like to try and prepay my hotels and flights ahead of time so that I do not have to deal with having to ever bring out my credit card except to pick up train tickets to travel and prove that I am the cardholder.

Other than for the rare times my credit card makes an appearance, I keep my credit card in an RFID sleeve like this one.


It also helps that I have a U.S. dollar chequing account as well, so all I need to do is convert Canadian dollars in my bank account into U.S. dollars, and withdraw it from my bank.

I use TD Canada Trust for this, and have the basic USD account that is free but only allows 5 transactions a month and does not give the best rate that they have.

For that you need to sign up for their fancier USD account and pay a fee each month or keep a certain amount of money in there.

Neither of which appeals to me.



I only keep maybe about $100 worth of money in my main wallet, and the rest is bundled securely and out of anyone’s casual eye.

DO NOT make the mistake of bringing $1000 and then putting all of the bills in one spot where everyone can see it when you pull out your wallet. You’re just asking to be robbed.

Put a hundred or two in your main wallet, and keep the rest in the safe at the hotel (if you have one), or hidden very securely in your purse where it is not easily seen.

That’s about it. I travel with cash, and I have never had my credit card information stolen. *knocks on wood*



  • SarahN

    Currently in Germany, having also been in Iceland this trip (another currency… why that point is relevant).

    I use a no fee credit card (ie I anticipate the exchange rate is ‘different’ to a card that also charges a international service fee, but I haven’t tested it out on two identical priced purchases at the ‘same time’ in the market of currencies).

    In Iceland, I withdrew cash – about $300 (USD AUD CAD, it’s a rough estimate), as I *thought* I’d paid all my accommodation (seems I hadn’t no dramas), and all my tours. For 6 nights, it felt like a fair amount to cover meals – and it was. In some cases in the last days, I paid part cash, part card, to use up cash.

    In Euro zone – I do hold cash from ‘last trip’ in the 20-50 range, likewise USD in my travel wallet. Means i have that coin for trains etc on arrival. But again I will also withdraw cash as I hate to use card for less than $10/10 euro transactions, just seems… a waste of infrastructure.

    Overall, I would caution your approach for a few reasons (and you are uber careful etc etc, but a person asking). Stolen or lost cash isn’t replaced by insurance (and if it is, it’s a small amount 200-300$). It also, in many places, screams TOURIST as more and more nations use cards for every single tiny purchase…

    Also, I have never used a currency exchange desk. Too quaint – and in shady areas, likely for a scam. ATMs all the way. Save for Japan, which is a pain with foreign cards and you have to find 7/11 which is thankfully everywhere.

    • Sherry of Save. Spend. Splurge.

      I AM SO MAD that I forgot to use my Amazon Visa no-fee currency card online for all of my aunt’s things, and then realized I used my other card instead which charges 4%.. *sob*

      You’re right about the stolen cash part…


    I’ve used both cash and credit while traveling abroad. I’ve never experienced any problem while visiting a foreign land. The conversion counters look the same in all airports regardless of whether you’re visiting Asia or Europe. My currency got replaced in real quick time. The risk of experiencing fraudulent activities isn’t uncommon even in big cities; I do a lot of researching on the places prior to my visit. I’ve developed this habit of carrying only the amount of cash that’s needed while I’m on road.

  • Kandice

    It’s been a looong time since I lived overseas as a child, but I remember my parents traveling with travelers checks because I *think* if they were stolen they couldn’t be used without being endorsed (and if something happened prior to endorsement you could get your funds back), so it wouldn’t be like cash sitting on the ground untraceable. I could be totally wrong and am too tired/lazy to google at the moment.

  • yettie

    I use a credit card with no foreign exchange fees to pay for hotels. Meals, transportation and other miscellany, I pay with cash. I don’t like travelling with cash on hand so I’ll typically have a debit card with me and withdraw cash from an ATM in my destination that’s not in the airport or hotel so as not to pay some crazy exchange rate.

    Some banks have partnerships with foreign banks where the ATM fees are waived. I’ve been a beneficiary of this setup when I had a Bank of America account (15 years ago but still valid today apparently). Scotiabank Canada is part of the consortium. (Google search “Scotiabank Global ATM Alliance if this link doesn’t work,,8093,00.html). No ATM fees in 40+ countries if you’re using a debit card from one of the member banks

  • Sense

    I have tons of great credit cards that don’t charge foreign exchange fees and do an amazing job of detecting fraud for me (note: this has only happened to me once, before I traveled to Rio de Janeiro, Brazil. They stole my info after I booked my hotels and flights, but I got a new card prior to my travels. My cc info wasn’t stolen while I was actually there.). I always have several cc’s on hand, at least one in my wallet and at least one locked in my suitcase in my hotel.

    I always choose to charge in the currency of the country I’m in. Charging in USD is just asking for extra fees/high exchange rates.

    I exchange a few hundos for places that don’t take credit cards after I land. Most airports have currency conversion places and offer the best rates (but I research this beforehand).

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