So you are ready to go on your great adventure. You have picked your destination, bought the tickets and your bags are packed. But what about money? How much should you take? What should you take: traveler’s cheques, cash, your bank/debit card, or credit cards? Making sure you take the right combination of funds will ensure that you have dream vacation and not a nightmare trip.
Bank/debit cards
The first thing you need to be aware of is that the use of the bank/debit card like a cash card is a phenomenon unique to Canada. Anywhere but Canada a bank/debit card is just that – a card you use to get cash from a bank machine. Although some retailers in the United States are starting to take debit cards, most places in Europe and the United States do not have the direct payment option available.
Your card can be used to get cash from bank machines but before you go that make sure are aware of where the card can be used abroad. Some cards, such as the ones from small banks or trust companies are not always good in other countries. Most cards have daily cash limits and charge an international transaction fee as well as a fee on the converted funds. Before you go, contact your bank. Inform them of where your will be going and for how long. Ask what your daily cash limit is. Ask if that is in Canadian funds or the local currency of your destination. One hundred dollars Canadian ($100) pre day may seem like a lot but when you are converting it to Euro dollars (at a conversion rate of $1.5 Canadian to $1 Euro) or British Sterling pounds (at $2.5 Canadian to one pound) it may not be enough. Raise your daily limit if necessary to make sure you will not be short of funds. You can always lower it again when you return home.
Find out how much the international withdrawal fee is per transaction and if they charge a surcharge on the converted funds. Most of the major banks charge a fee for foreign withdrawals, usually $3 in the USA and $5 elsewhere. They also have a surcharge on the converted funds of 2.5%. Many international banks will also charge a fee for using their machines if you do not have an account at their bank. Do not assume that because you do not pay per transaction here in Canada that the same rules will apply when you are in another country. And remember the USA is another country, the same as England, Thailand or Australia and international banking fees will apply when you use your card there. Some banks have a minimum amount you must take out on an international transaction, be sure to check when you make the withdrawal.
Traveler’s Cheques
Although traveler’s cheques are still common here in North America, they are no longer widely used in Europe. If you are travelling in the USA or Canada you can still easily cash traveler’s cheques. Since they no longer sell them in Europe, they can only be cashed at banks that can add a hefty service charge and take a percentage, usually 3%. If you must take traveler’s cheques, take them in US funds. You will still pay a premium to cash them but at least some of the currency change houses will cash them for you.
Credit Cards
Most major credit cards are accepted around the world. Visa and Master Card are the best to take, as some countries will not accept American Express Cards. Contact your credit card company before you go. Inform them of where you are going and how long you will be gone. Many credit card companies will deny a transaction made in a foreign country if they are not aware that you are travelling. It is also advisable to have a credit balance on your card before you leave. That way if you need a cash advance you will not have to pay any interest but be aware, you will still have to pay the international transaction fee and surcharge.
Cash
Cash is accepted everywhere but most people do not want to carry large amounts of cash with them. Always take at least $100 in the local currency. That way you will not have to worry about changing money when you first arrive after a long international flight. If you are going to take a large amount of cash, get a combination of large and small bills. Cash the larger bills at a bank. Try to take the local currency whenever possible and do not assume that you can change your Canadian money everywhere. Most European countries offer exchange rates for Canadian funds but some places in Asia, Africa and South America only want American dollars. Do not keep all your cash or credit cards in one place, split them up. That way if your wallet is stolen, you still have access to your funds.
When traveling it is best to take a combination of cash, credit cards, and a bank card. Always take some local currency so that you are not stuck when you first arrive. Split up your money and cards. Do not carry them all in one place. Use the hotel safe for your passport and money when ever possible. Have someone at home who can put money into your bank account or on your credit card in case you run into financial problems. This could be a family member or even a person who works at your local bank. You can authorize them to make payments on your credit cards and transfer money if you need it. This is especially useful if you are travelling for a long period of time.
