I had a few questions on how to pay for things before I spent a whole semester traveling around Asia with ILP — would cash be best? What about my credit card? Anything else I should know? Sit tight, because all of those questions (and more) are answered below.
You know the drill here in America. You want to buy something, you check the price tag, and you pull out your debit or credit card. But is that how it works in Asia? What about Africa? How do you manage paying in different currencies when you're traveling all over Europe (and visiting another country every other weekend)? After more than a few trips abroad, I've pulled together a bit of a mini-guide to paying for things abroad.
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I've broken things up into categories to hopefully organize the info and let you jump around to what questions you need answers. It's a bit of an overview with some specific examples when necessary, so hopefully this post works as a guideline so you feel prepped to buy all sorts of souvenirs, street food snacks, or amazing excursions (like an African safari) during your time abroad.
Paying With Cash (Things To Know)
When To Pay With Cash?
You may buy everything with plastic at home, but cash is king in quite a few countries. Your favorite little fruit stand in Asia or the souvenir stalls in Africa are not going to have card readers. In general, things off the side of the street (mostly drink shops, smoothie stands, fruit stands, snack stands, etc) are best in cash. Most souvenir shopping is done in cash (unless you're purchasing higher-end items, like artwork or high-quality clothing or photography.) Smaller events (like museums, festivals, etc) will also be best in cash.
You will also want to be paying in cash whenever the price is negotiable, like when you're bargaining prices while souvenir shopping. It's a big selling point to pull out the exact amount you're offering (let's say 20 euros) as a way to communicate — this is the cash I'm willing to spend on this item, no more. It's less convincing of a strategy when you pay with your card.
Paying in cash may also save you money, depending on what the foreign transaction fees are on your credit or debit card. You'll for sure want to bring those along too for some instances — we discuss the pros and cons of paying with a card (plus those transaction fees) below.
Converting US Cash To Local Currency
Most countries around the world don't use the US Dollar, so you'll need to switch your USD into whatever currency the country does take. In general, it's not recommended to swap your USD to local currency because of the exchange rate. There's a tendency for airports, banks, and money changers to give you a high rate, meaning your $100 may only equal $75 when swapped over. Not great.
Sometimes there are exceptions to the rule — if you want to swap over US cash to another currency, always check the exchange rate and find a changer that's close to that. The vast majority of times, I get local currency out of an ATM, which is explained below.
Using An ATM
If you've used an ATM at home, you're good to go while abroad. Most ATMs abroad have several language options, most of which include English, so you're good to go on that front. If not, I've used the "picture mode" of Google Translate to help me figure out what the little screen is trying to tell me. It's pretty simple and straight forward — you'll insert your card, select which account to pull from, then select the amount you want to receive in that currency.
One thing to note — ATMs will typically spit out larger bills, which are handy to break so you have smaller bills for littler purchases. I tend to visit a convenience store and buy a small snack to break a bill or two after an ATM visit.
Watching ATM Fees
Another thing to be aware of is your bank's international ATM fees. Some banks charge a set amount, no matter your withdrawal (example: $5 every time you use a foreign ATM) while others charge a percentage of what you withdraw (example: 3%). You can get a list of banks and their fees here. Looking for banks that just charge a flat way can be a way to go, too. If you are pulling out $200 into the local currency, a 3% foreign transaction fee means paying $6, where some banks may just charge a late rate of $2.50. If you will be traveling abroad for a long period of time and plan on using mostly cash (ie: you will need to pull out larger sums out of the ATM), a flat rate is a better deal.
Knowing your bank's ATM fees can help you decide if it'll save you money to use the ATM and pay with cash, or take the foreign transaction fee associated with your credit or debit card.
Paying With Your Card (Things To Know)
When To Pay With Cards?
Typically, malls, restaurants, large tour companies, hostels, museums, airports, and transportation stations (trains, buses, trams, etc) will all accept major credit cards.
Visa is pretty internationally recognized, and Mastercard is found in several regions around the world. American Express and Discover are found less frequently. I typically always travel with a Visa card, then see if I can find somewhere that takes American Express (because I get miles with Delta Airlines on that card).
Foreign Transaction Fees
Like we talked about above, cards sometimes charge you a foreign transaction fee whenever you make a purchase. That can really add up if you're using your card a lot while traveling! As a heads up, there are higher foreign transaction fees/ATM fees if you use a credit card, so opt to use a debit card instead.
I recommend looking into card options with low or no foreign transaction fees if you intend to do at least two international trips at some point.
A Few Helpful Tips
A Bit More On Cash + Cards
I tend to like paying with cash and card when I travel, but mostly cash. Cash is set aside for meals, tips, museum entrance fees, souvenir shopping, etc. I tend to pay for hostels, tours, play tickets, etc with my card. Personally, I can keep track of my expenses better when I pay with cash, plus with the cards I carry, it's more economical to take the ATM fee over the foreign transaction fee. But that is just me!
I have friends who have cards with zero transaction fees, so they pay with their card 90% of the time and only use cash for the cash-only experiences. I highly recommend researching your card's foreign ATM fees vs their foreign transaction fees to see which is best for you.
Bring The Right Wallet
Since you will always want to carry some cash, make sure you have a wallet that can handle some bills and coins. At home, I use a super minimalist Thread wallet which I absolutely love, but it's not conducive for carrying cards, cash, and coins. I swap over to a wallet (kinda like this one) when I travel.
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Juggling Several Currencies
One of the trickiest things about traveling all around Europe was visiting tons of countries and needing to juggle half a dozen different currencies. Quite a few countries in Europe use the Euro which is handy, but you'll need to swap that out for zloty, forints, krona, hryvnia, and others if you really do some traveling around.
When I spent a semester volunteering in Europe, I visited around ten additional countries before I came home. I found it easiest to pay mostly with my card, and pull a bit out in cash while I was over there (using an ATM). It also helped to research which things we wanted to do were cash only — I made sure I had enough cash for those, then paid cash for snacks/activities before leaving the country. I didn't totally break even, but bringing home a few bills and coins make for a fun souvenir.
Before Leaving, Call Your Bank
To make sure your bank doesn't put a hold on your card, tell them you will be traveling. I can't tell you how many stories I've heard about people who skip this step and have their card frozen when they tried to purchase something while traveling. It's a big mess to untangle and easily avoidable if you contact your bank before your departure.
I always let my bank know which countries I'll be visiting, including the countries I have layovers on. I don't want to risk my card being frozen and preventing me from getting a meal at an airport on the long flight home.
For most major banks you can just jump on your account or your app and log a trip, but for others (usually smaller credit unions) you'll just want to give them a call and let them know you're planning to travel and wanted to let them know.
Now that you have these tips, where are you off to?
What about spending a semester traveling abroad? International Language Programs (that's us) is a non-profit based in Utah, USA. We help college-age volunteers get set up to have an experience of a life-time, like a semester abroad exploring Africa, Europe, Asia, the South Pacific, and other spots around the globe. You'll get to join a group of American volunteers your age (so a group of new friends!), live together for four months, help kids learn English, travel around, and so much more. Check it all out below.
