Money Tips

When travelling you have many options to pay for your needs: cash, debit/credit cards or travelers checks, and if you are in the US your personal check may also be accepted. If you travel to a country where the currency is other than the American dollar, it is in your best interest to know a few details ahead of time.

Cash: you can take American dollars with you and exchange them as needed, but be aware that many booths at airports and cities have very high commissions and you can loose a lot of money. If you need to change money, go to a bank as their commissions are lower or null. Remember to ask and understand everything before you do the transaction. Take your time and do the math!

Traveler’s Checks: These checks are issued by banks, the most common being AMERICAN EXPRESS, and printed in the currency and denomination of your choice. You have to order these in advance and they have a security advantage as they are fully refundable if lost or stolen. As per our experience, the problem with traveler’s checks is to find a place where to cash them as some banks don't like to deal with them. Those that accept them may charge a 1-2% commission.

Credit Cards: VISA and MASTERCARD are always accepted, but AMERICAN EXPRESS can be a problem in some European countries as it charges the merchants twice as much as VISA or MASTERCARD. (Big cities in Latin American countries tend to accept AMERICAN EXPRESS). When you pay with your card your bank will convert the foreign currency to American dollars at the official rate on the date they post the transaction in your account plus a commission that usually is around 3% of the transaction. These percentages change among banks and you may find out yours by reading the fine print in your statement or by calling your financial institution.

Debit Cards: Today most of these can be used as credit cards if a VISA or MASTERCARD logo is printed on the card. The banks will usually charge you the same commission as with a regular credit card. If you use them at an ATM to obtain local currency, your institution will charge you a fee per extraction, anything from $1 to $5. The good news is that the majority of the banks in Europe will not charge you for the transaction.

Curious about what we do? We take US$100 in cash to spend while we are flying within the States, our credit card of choice and a debit card. Upon arriving, we get about €300 at an ATM. (our credit union charges $1.50 per transaction and uses the official currency exchange rate. If the card is used as credit, there is no transaction fee and no commission is applied). We pay mostly in cash and extract as needed. This way we don't risk loosing a lot of money should anything happen. Credit cards are used for big hotel bills, shopping or renting a car. The debit card is used to pay for gas, tolls and restaurants if we are low on cash.

Keep in mind that European and Latin American countries use mostly cash and they will not accept your credit card to buy a bottle of water at the local store. Always have cash with you for Bed&Breakfasts, local transportation, food, museums and other local attractions.