Traveling isn’t only costly, but can also be fraught with stress, insecurity, and uncertainty. From finding the cheapest airfare to looking for the best hotel offers, travel involves more than just tricks and the best timing to get the best deals.

It also involves sound planning and basic common sense. When it comes to money, having a well-researched travel plan helps answer troubling questions better and is less likely to deal with uncertainty.

Imagine yourself in these situations:

  • You are in a queue for train tickets in a foreign land you know little about the local language. There’s an ATM nearby that won’t honor your debit card, and the teller says the payment is by cash only.
  • You try to withdraw cash in the middle of your holiday but for some reason, your ATM got retained.
  • You are torn between choosing money exchange shops that might offer bad rates or ATMs that charge high service fees for foreign cards.

What would you do?

Regarding what currency to carry

When you are traveling in a country where the currency is different from what you use at home, obviously it makes sense to carry local money. What’s less obvious is that in some countries, certain currencies are not accepted or available for exchange at money changer shops. For example, the Hong Kong dollar is not accepted at most money-changing shops in Morocco. So besides the local currency, foreign money that’s accepted in many places are US dollars, Euros, and British pounds.

Research on:

  • What is a commonly accepted currency in my destination country?

Regarding how to obtain local currency

In most cases, you may bring your own currency and troop to the money-changing shops stationed at the airport’s arrival areas. But it may be better to head to an airport’s automated teller machines and withdraw cash at once. Some banks charge the same fee regardless of the amount you withdraw so you’ll save extra bucks when you withdraw all money you need from their ATMs at once.

Research on:

  • Which banks in my destination country support my debit card?
  • How much interest rates do bank ATMs charge and their limits?

Regarding which currency to pay for credit card bills

Sometimes credit card bills like those in paying for airfares are presented with options to pay in local currency or your default account currency. With so-called dynamic currency conversion charges made by firms that process the transaction, you could pay extra when you choose your default payment currency instead of the locally charged amount. So the next time you encounter such choices, be sure to choose the local currency rather than the default currency you pay when bills arrive.

Research on:

  • Dynamic currency conversion

Regarding using credit cards

The lure of using credit cards is high when you travel because they present both convenience and flexibility. However, you may also be subject to fraud risks that could happen when you leave your card unattended while some unscrupulous trader/restaurateur takes advantage of it. It’s best to notify your bank about your travel plans; certain banks activate alerts when certain purchases are made outside of your normal buying patterns (different places, large amounts). If in doubt such as point of sale machines are not visible in the shop, ditch the card payment and settle with cash.

Research on:

  • How to activate fraud alerts on your credit card provider
  • Common credit card scams in your destination

Regarding whether to haggle or not

In many countries, haggling for the price of the merchandise is both fun and sometimes an essential part of a commercial transaction. By being able to bargain for the price, you as a customer can test your skills as you try to stretch your travel money. But when will you consider haggling? The rule of thumb is that when a shop has a “fixed price” sign prominently displayed or the price is clearly displayed, you may not want to try to attempt to lower the price though the rule is not always set in stone.

Research on:

  • Haggling in (country/city)
  • Best practice when haggling

Regarding carrying cash

Even though more methods of payment require no cash transactions, cash remains king in many countries, and carrying them still puts you at ease. However, when bringing them do not place them in one location. What if you get robbed or misplaced your stuff? It’s best to carry a reasonable amount of cash and leave the rest in a secured place like the locker in your hotel room. You need to have your own idea of where to hide your stash of cash: secret pockets, under your socks, or other places imaginable.

When carrying cash, it is best when you bring along smaller denominations especially when you are getting to know the coins and bills. This helps in situations when you are paying for a taxi or buying goods and could potentially be shortchanged.

Research on:

  • Is (traveler’s check/credit card) a commonly accepted payment method in my destination?


Regarding exchanging currencies

It is sometimes inevitable that you need to exchange your cash with local currency to make the most of your purchasing power. But before you think exchange rates for licensed institutions are unfavorable and might want to consider the black market rates peddled by folks in touristy areas, think again. You’ll have a higher rate of getting ripped off using this route than when you transact with legitimate traders. Don’t fall, though, for ‘no commission’ offers as shops find other means of making money such as unfavorable exchange rates.

Research on:

  • Common money changer scams in your destination country

Regarding using ATMs

Just because there’s an ATM outside the arrival area or the touristy districts during your holidays doesn’t automatically mean your card will be accepted and you can withdraw cash. Local banks providing ATM services are in partnership with financial networks both to extend their services and make more money. Sometimes transactions fail because there is no existing relationships that exist between local banks and ATM networks such as Cirrus, China’s UnionPay, Germany’s Girocard, or Canada’s Interac. Check your ATM, identify the supported networks based on displayed logos and check which banks and ATMs support them in your destination country.

Sometimes ATMs don’t work because of power interruptions or patchy phone networks, so bringing cash before arriving is a fool proof plan.

But what should you do when your card gets retained by a machine for some reason or another? First and foremost, contact your bank — usually, it has a number to call when retained. You may have to visit a local branch of the bank of the machine that retained your card. Be ready with your identification, and details of the incident (the time it happened, which ATM you used, how much you intended to withdraw, etc). While most cards are returned or replaced free of charge, the time spent on resolving this often involves unnecessary stress and worry.

Research on:

  • Bank networks supported in your destination
  • ATM network of your bank account
  • Procedure when ATM card is retained

Regarding VAT refunds

Travelers may avail of VAT refunds on destinations such as Europe. When making purchases of at least a certain amount, refundable sales taxes can be availed. In Europe, standard sales taxes range between 15% and 25% and that’s a lot of money left behind if you are on a shopping splurge for clothes or jewelry.

Though not all shops participate in this scheme, many of those targeting tourist currency do — you’ll find the “VAT refund” sticker posted on the wall or simply ask the storekeeper. Just present your passport every time you make a purchase and fill out a form you need to present at designated counters at the border/airport.

Research on:

  • Shops that offer VAT refund in your destination
  • VAT refund procedure in your destination county

Regarding emergency money situations

Withdrawing cash and your ATM gets swallowed by the machine in the middle of the night, leaving you short of cash and with outstanding bills to pay? It’s not the end of the world. Thankfully you can ask someone to wire you money. MoneyGram and Western Union have branches worldwide and can channel the cash you need. Just make sure you have someone ready to send the money.

Research on:

  • Money remittance in your destination country
  • Procedure when receiving money in your location

That being said, it pays when you make prior research on handling financial matters when you travel. While cash may be ready and available, extra knowledge helps you make better decisions. Always have a backup payment method and trust your instincts when it comes to making financial transactions.