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The last thing you want to do when you land in a foreign country after a 20 hour flight is track down a currency exchange booth (assuming they’re even open). However, in many countries from India to Costa Rica, you have no choice but to deal in cash. Traveler’s checks might have been the go-to option for your parent’s generation, but when you really need it (like with taxis) they don’t do the trick. They might be seemingly safer since you can replace them if lost or stolen, but not without a bit of a headache.
The best way to actually deal with financing while abroad is a good mix of local currency as well as plastic that’s designed to keep fees to a minimum. Plan ahead and see if the country you plan to visit accepts dollars (many merchants and drivers in foreign countries do since the dollar can still pull impressive weight in some parts of the world). However, also know exactly where reputable currency exchange stations are in the airport and near where you’re staying.
Your top priority
Carry small bills with you, and know the exchange rate and any associated fees. Similar to financing a mortgage or car, there are better times to “buy” than others. The dollar as well as the exchange rate changes on a daily basis. Don’t try the short cuts and go with shady “exchangers” just because they promise a better rate. You never know if you’re getting counterfeit currency or, even worse, getting ready to be a simple robbery victim.
While it’s crucial to have cold, hard cash in many countries, keep it to a minimum. Even in some developing countries, taxis and mom and pop shops now accept plastic. However, those foreign transaction fees will quickly add up. Only a handful of American financial institutions offer credit or debit cards with no foreign fees, including Capital One Venture and Charles Schwab (although Schwab requires a brokerage account, which is also free, in order to get the international-friendly checking account).
Notify your banks
For those who travel regularly, it’s smart to get a card that is global-friendly, but even if you don’t, always remember to notify your financial institutions of traveling abroad. Otherwise, your funds might be frozen it fraudulent activity is suspected. You don’t want to get stuck figuring out how to call abroad and having no access to funds.
Finally, avoid carrying wallets or large amounts of cash. Make use of the hotel or hostel safes, and if possible keep money closely tucked against your skin in hidden pockets. A financial blunder can ruin even the best vacation.
