Lonely Planets travel money essentials

It’s the ultimate travel nightmare. You use an ATM in a remote part of the world and it eats your card. What do you do? You’re booked to leave on the 8am train and the bank opens at nine. Yesterday was a general strike and tomorrow is a national holiday. All you have left in your pocket is a few notes and there’s still the hotel bill to pay. Eek. You could always throw yourself on the mercy of strangers (on one occasion in Nepal, we were able to call the bank manager at home and persuade him to get out of bed and retrieve our card), but it’s best to have a plan B, particularly when it comes to your hard-earned travel cash. It’s crucial to take the time to prepare for worst-case scenarios before you leave home – which is much less stressful than trying to troubleshoot in a foreign country. Here’s how to keep your money flowing – and safe ­– on the road.

Carrying cash

The golden rule for travel money is never keep all your eggs (money) in one basket (your bag or wallet). If you get robbed or misplace your stuff, you lose everything. Carry a useful amount of cash for a day hidden somewhere discreet, and leave the rest in a secure spot, like your hotel safe, even if you plan to primarily use a bankcard while abroad. Everyone has his or her own trick for hiding emergency stash. Money belts, secret pockets, a Ziploc bag tucked into the lining of your suitcase, an old film canister in your washbag – after all, when was the last time you heard of somebody stealing a washbag? Here are some more handy tips for how to handle cash when you're on the road:

• US dollars, British pounds and Euros are the easiest currencies to change, particularly in the developing world. Keep enough aside to support yourself for several days. Use smaller-denomination bills, so you don’t have change everything at a disadvantageous rate.
• Changing money on the street is a great way to get ripped off – especially if you’re unfamiliar with the local currency. Always be sure to exchange foreign currency with a recognised trader, such as a bank or exchange bureau.
• You will always find better rates on exchanging foreign currency if you plan in advance, rather than changing it at the airport or abroad. There are many ways to buy foreign currency (online, offline, from banks or from private retailers), so find out your options beforehand.
• Ignore boasts of ‘no commission’ as this won’t always mean you get more bang for your buck. Do your research and find out exactly how much money you’ll get from the exchange – the more you get, the better the deal.
• There are some destinations where cash is the only game in town. Parts of Africa and Asia have yet to plug into the global ATM network, so the only money available is what you bring in. Most countries have limits on the amount of foreign currency you can import or export, but this is typically in excess of US$10,000 – the challenge is keeping your money safe while you travel.

Exchanging money for foreign currency. Image by Marco Ament / CC BY-SA 2.0

Cards

Using cards on the road can have loads of payoffs, and it’s smart to use a mix of these so that you have backup if your primary money goes missing. Credit cards come in handy for making reservations, larger purchases and are excellent in case of emergencies. Debit cards allow you to access your money the same way as you do at home immediately, without the looming credit card bill to come home to after holiday. If your ATM debit card is linked to a major global credit card company, you’ll have no problem making withdrawals in hundreds of countries worldwide. Many card programs also include emergency cash or replacement card services, which can get you out of a tight spot, so it’s important to know how to contact your issuer if the need arises. Many banks and credit card companies now offer prepaid cards, which can be charged as much as you like and used like a debit card. They’re great for sticking to your travel budget, are available in single or multiple currencies and often have the same benefits as debit cards, such as emergency cash and card replacement services. Just be sure to check how easy it is to get any remaining balance back from your card when you return. As an added bonus, most cards offer favourable exchange rates you can lock in before you travel, and you can recharge the card online, by phone or SMS.

Colorful ATM in Paragon, Bangkok, Thailand. Image by Dennis Wong /  CC BY-SA 2.0

If you’re using plastic, here are a few simple rules that every traveller should follow:

• Make sure your credit, debit or prepaid card is accepted in the country you plan to visit.
• Call your bank and tell them where you are going and when, so they don’t block your card the first time you use it on your travels. Many banks allow you to do this online.
• Never let your card out of your sight. Most credit card scams require time alone with your card – if you don’t see an electronic-point-of-sale machine, play it safe and pay with cash from an ATM.
• Keep essential emergency phone numbers handy – that means the local police and the international number to cancel your cards if need be.
• Check the layout of the keypad on the ATM. Loads of travellers lose their cards by entering the right pattern but the wrong numbers on a foreign ATM keypad.
• Always carry back-up cash or travellers cheques. ATMs rely on electricity supply and a phone signal, two things that are notoriously unreliable in the developing world.
• Bring multiple cards and store your extra card locked away in your room’s safe with your other valuables, in case of emergencies.
• Be aware of bank charges – banks charge a fee for every withdrawal, and most offer poor exchange rates for credit and debit cards.
• If you have the option, pay in the local currency on your debit or credit card when abroad, as your bank’s rates will be better than the retailer’s.

Travellers cheques

The global proliferation of ATMs (they even have them high in the Himalayas) has made travellers cheques a less-popular option. They are no longer as widely accepted as they used to be, and changing cheques can involve drawn-out bureaucracy and yards of red tape. However, they do have their advantages: they are accepted by banks and moneychangers all over the world and are easy to replace if lost or stolen. So long as you have the receipts and the emergency phone number, you can get new cheques in a matter of days, though you may have to travel to a local agency to pick them up. Thomas Cook and American Express are the most widely accepted brands, but before you buy cheques, contact the issuer to find out just how widely they are accepted in your chosen destination, and which currency the cheques should be drawn in. When in doubt, carry cheques in US dollars, the unofficial second currency in most of the world. Bring a mix of denominations, keep the receipts separate from the cheques, and save the emergency phone number somewhere safe.

Wiring money

If all other options fail, you could always ask someone to wire you money. Western Union and Moneygram have agents all over the world where you can receive a wire transfer from home, but you pay a premium for the service – sometimes as much as 30% of the transfer amount. Just pray you have an understanding relative!