How to Carry Money While Traveling

one hundred dollar bill

Diversify Access to Your Travel Funds


Nothing can mess up an otherwise-excellent backpacking trip like losing access to your funds. Whether your bag is lost at sea or a decrepit ATM decides to make your card lunch, you should always have a backup for getting access to your travel funds.

As investors still preach, the secret is to diversify. Don’t lean too heavily on any one particular way to carry money. Needless to say, banks are skeptical about mailing out new cards to foreign countries, and it may take weeks or longer for a new card to arrive in international mail. Save yourself a lot of stress by having a backup cash plan.

Choose wisely: you can save money while backpacking this winter by avoiding bank fees and transaction fees while on the move. We’ll cover the basic ways to carry money while traveling and the drawbacks/advantages of each.

Before Traveling

The number one mistake made by many newbies on their first trip is to not notify their banks that they will be traveling. Nothing ensures that your card will become deactivated for fraud faster than a charge unexpectedly popping up in China while your current residence is in Colorado.

You’ll need to add travel notifications for your ATM and any credit cards that you’ll be carrying. Contact the bank and speak with a human to ensure that they have your travel plans on file. On that note, if your bank asks for travel dates or countries, don’t use an ATM in transit at a country not on your list (e.g., during a layover) — you may find that your card has been deactivated by the time you land in your first country!

Using ATMs while Abroad

Many new travelers are surprised to find out that they will usually get the best international exchange rates from the local ATMs. With only a few exceptions, you’ll find Western-connected ATMs nearly everywhere that you travel. Maestro, Plus, and Cirrus ready cards work best.

Don’t keep your ATM card in the wallet; instead, keep it with your passport so that you can replace lost funds in case the wallet is stolen or left behind.

As every traveler to developing countries knows, keeping small change is a challenge! Drivers and vendors rarely have change, so those big denomination notes you just got from the ATM can be difficult to break and spend. You can help by entering odd numbers into the ATM (5900 baht instead of 6000) so that it is forced to spit out a few smaller notes, then horde those smaller notes and demand change from people whenever possible.

The ATMs in remote places and on islands can be stubborn; they may run out of cash or simply lose their network connection. You’ll want backup ways to access cash in places where the single cash machine may break down at any moment.

Whenever possible, try to use ATMs that are connected or inside of banks. This reduces the chances that a card skimmer is install (a real problem everywhere) and increases the chance of getting your card back if the machine captures it.

Note: ATM fees vary greatly by country. In Thailand, they are as high as US $6 per transaction! Take out the maximum allowed so that you don’t have to feed the bankers every few days.

Carrying Cash

While certainly the most flexible and accessible, carrying a lot of cash is also a liability. Keep larger denominations of local cash in your money belt with your passport — preferably locked up or hidden at the hotel — then refill a smaller wallet to be carried as needed.

Separating funds on your person is crucial. It’s handy to keep a wad of the smallest denominations loose in a pocket for places where baksheesh or tips are regularly expected. Ensure that bribe-hungry policemen and thieves only have access to a small part of your cash — what’s in your wallet — at any given time.

Do your best to refuse currency that has been torn, damaged, or defaced; these are often passed along to foreigners and may be difficult to spend later.

I like to hide a folded US $50 for absolute emergencies somewhere bizarre and unexpected. Get creative. Put it in your sewing kit, an empty lipstick tube, etc.

US Dollars

No matter the status of the U.S. economy, the dollar still works great around the world. Many countries prefer American dollars over alternative currencies or even their own currency. Cambodia, Laos, Vietnam, Mexico, Jamaica, and Ecuador are all more than fond of the American dollar, just to name a few.

When using dollars to pay directly, always keep in mind that the hotel/restaurant/shop is in control of the exchange rate. You may be better off paying with the local currency which may be largely useless to you once you leave the country.

If you intend to only change dollars into the local currency, you’ll want larger notes (50s and 100s) that are crisp and in good condition. You’ll need denominations of US $20 or less if you want to use dollars for more than just emergencies.

Credit Cards

You’ll need a credit card for travel, however, outside of booking online, expensive hotels, dive shops, and trekking companies, you won’t use it much. Most places tack on a commission when paying with plastic; always ask so that you aren’t surprised later. Also, keep in mind that every time you use a credit card increases the chance of it becoming compromised. Try to use it only for bookings on secure networks; never on public computers.

A credit card provides a certain peace of mind. You can use it for booking flights, emergencies, and to cover medical costs until insurance reimburses you. Record the number, special code, and expiration date somewhere cryptic in an email to yourself. Include both the 1-800 number and international contact numbers so that you can call from abroad if the card is lost/stolen/compromised.

If you don’t own one already, you can find low-interest credit card offers online. Visa and Mastercard are the most commonly accepted cards abroad.

Traveler’s Checks

Traveler’s checks, the old-school way to avoid carrying large sums of cash are still an option, although they are growing more and more obsolete. Just to diversify your funds even further, you could consider carrying some American Express traveler’s checks to cash for emergencies. You’ll be charged a commission for each check that you cash, so carrying a few larger denomination checks is best.

Traveler’s checks are only useful to be exchanged at banks for local currency; you cannot use them to pay in hotels or at shops. Record the refund numbers and keep them hidden someplace away from the checks!

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