Travel and Money: Best Way To Get Cash, Best Credit Cards, and Safety Concerns

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I wouldn’t say my wife and I are well-traveled, but we do try and experience other cultures whenever we can. Given work constraints and Corporate America’s hatred of vacations (2 weeks a year??), we are lucky if we can manage one trip per year. However, I think we’ve worked out a pretty good system of managing money needs while abroad.

Travelers Checks?
I never buy travelers checks. You often have to pay a fee when you buy them, and then you might have to pay a fee for exchanging them to local currency. Or you’re searching all day for the American Express office. Less and less stores accept them for purchases, due to fraud and theft. If your signatures don’t exactly match, they give you grief. If you get them wet, they are useless and you have to replace them.

Most importantly: Any place that does take them will most likely accept credit cards, which are a better alternative (see below).

Best Credit Card For International Travel
Whenever possible, I use a credit card for making purchases while abroad. Hotels, transportation, sightseeing tickets, and so on. However, most credit cards are pretty expensive when it comes to foreign currency purchases. Visa and Mastercard charge a standard 1% “conversion” fee on top of the wholesale “interbank” exchange rate. Many major credit card issuers like Citi, Chase, and American Express charge you another 2%-3% on top of that. You’re losing up to 4% off the bat.

So what do I use? My favorite card, hands down, is my credit card from Capital One . I have used this card from China to France with no issues at all. Capital One charges you only the interbank currency exchange rate. They pay the Visa/Mastercard 1% fee for you, and they don’t have any self-imposed surcharge. Finally, this specific card gives you 1% cash back on all purchases (2% for groceries/gas) and has no annual fee.

Net result: Not only do I get the best exchange rate possible, but I actually gain 1% cash back on my foreign purchases. It’s better than cash!

(I only use this card internationally. While in the US, I prefer these cash back credit cards.)

ATM Cards / Getting Cash
I used to worry about bringing some local currency with me, but it is usually expensive to get this done in the US. (Always compare their rates with the interbank rates at Nowadays, if you are arriving in a large international airport, there is hardly any chance they won’t have ATMs available. I do bring $100 in US $20 bills in my money belt as an added backup.

When it comes to getting cash in local currency from ATMs, there are also fees to be aware of. The local ATM may charge a fee, although bigger banks are less likely to. Your bank may also charge a fee for using a non-network foreign ATM. Finally, they may charge a surcharge for the currency exchange itself.

Because I use a credit card for most large purchases, I usually only need cash for restaurants and other small things. Therefore, I usually take out all the cash I expect to spend during my stay all at once, as it is no more than a few hundred dollars. Since I only have to pay these fees once, I don’t worry about them as much.

For example, on a $300 withdrawal using my normal WaMu Free Checking account, I will be charged a 3% exchange fee + no ATM fees. I am okay with paying a one-time fee of $9 for this convenience. My backup card is with Bank of America, where it would have cost $8 total (1% + $5), though they do have some partner banks with no fees. I like sticking with big banks here.

A good comparison of all these card fees is located here.

Money Belt and Wallet
After experiencing firsthand how slick a professional pickpocket can be in an Italian train, I don’t go anywhere without my trusty money belt keeping everything hidden safely underneath my clothes. I usually put in my week’s worth of cash, my backup credit card, two ATM cards, emergency numbers, and my passport.

My wallet only holds a day’s worth of cash (~$40) and my primary credit card. I usually also have travel pants with zippered pockets. This way, if it gets stolen I am only out a small amount of money and one credit card.

Lost Your Credit Card While Traveling?
You can easily report your lost card to the major issuers while traveling internationally by calling these US numbers collect. Write them down and keep in your money belt, along with any credit card numbers.

  • Visa: 410-581-9994
  • Mastercard: 636-722-7111
  • American Express: 336-393-1111
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  1. Good tips, Jonathan. Thanks.

  2. Why not use Capital One? Capital One Direct accounts come with an ATM card that has a 0% foreign currency fee. Also, a friend of mine uses his ATM card from Commerce Bank and reports the same policy.

    Why pay?

  3. ThePessimist says

    Jonathan, several of the Amazon reviews for that money belt suggested that it came unbuckled very easily and that it was shoddily made. Since you called it “trusty,” does that mean that you consider it well-made?

  4. I think the ATMs fees you quoted are too high. I have only used my Credit Union check card at foreign ATMs. I have been only charged the interbank currency conversion rate of 1% and nothing else. Then again I have been careful to use foreign banks that do not charge you for using their ATMs. I have used Deutsche bank in Germany and ICICI bank in India. Both of them never charged anything for using their ATMs. So there you go. I personally would suggest using check card as credit at point-of-sale in foreign locations. Those are a lot cheaper than credit cards. But then, you need to have the money in your account and you loose credit card protection. Just my 2 cents.

  5. I hate that 3% fee WaMu charges. They used to charge only the 1%. I’ve stopped using them.

  6. Jonathon,
    Can’t find anything about the travel rates on the Capital One link in your article. Can you direct me to where it describes the terms you mention. I notice it charges interest over two months, if you miss one month of paying your balance in full. Found out the hard way, Chase is doing that. I pay mine every month, but one time last year was a day late, and was shocked that I got charged interest for two months.

  7. One more question. I am trying to finally sit down and get this credit card thing sorted, as I start on a remodel project. Several months ago I applied for a Citi card mentioned here with 3% cash back, at first they denied it cause I didn’t have a balance on any credit card, when I got that straitened out they sent a card with not as good terms and a low limit. My question is should I cancel that. Do you know when having too many CC starts to impact credit score? I know having credit lines are good, but think there is a tipping point. Does it impact your credit when you cancel a card, other than reducing your credit line? I find Chase very annoying, they upped my interest to 20% years ago and even though I have excellent credit they will never reduce it.

  8. I have in the past also kept an eye on the dominant bank in a particular region and if they have a US presence, I open an account with them, get an ATM card and fund it with travel money. For example, I opened a HSBC savings account prior to travel in the Middles East. This worked great and I was able to at all times withdraw money only from HSBC ATM machines and incured no fees. Of course, this strategy only works if the bank has enough branches in a region.

  9. Good Info, Jonathan. I do not have a capital one card and i do not wanna open one. I am just waiting for the diners club locations accepting discover cards as discover card bought diners club recently and discover does not charge any foreign transaction fees. Also, if you are traveling to China, you can use your discover card for no foreign transaction fees with Union bank of china.

  10. Wow. Wish I had that schedule of fees when I went to Europe. I would’ve used my Capital One card!

  11. Thanks for those collect numbers Jonathan!

    Any idea how I can find out what Discover’s number is?

  12. I feel you with the pick pockets. I didn’t loose anything though. The money belt is good to have. Prague is the #1 place for pick pockets I think. They gang up on you. For example, 2 people fake pick pocket you(trying to feel your pockets from the outside) and you’re distracted and another one takes something form your pocket.

    I also liked Bank of America. When I was in London, I used Barclays without fees.

  13. or u can always buy currency online through Wells Fargo Currency Exchange. I just bought £5000

    they have the best exchange rate. Plus there is no fee to use your credit card which means u also get 1% back.

    Awesome service!!

  14. xmasy – Those Wells Fargo “competitive” exchange rates are not nearly as good as the interbank exchange rates. Compare with Just looking at the Euro/USD conversion, there is at least a 3% markup built into the rates. They aren’t eating those credit card fees for free!

    The difference with Capital One is that the merchant is paying the credit card transaction fees.

  15. Today’s Wells Fargo rate: You pay $1.8804 for 1 pound
    Today’s Interbank rate: You pay $1.81918 for 1 pound
    Yesterday’s interbank rate: $1.79037

    That’s a 3.4% markup from today’s price, and a 5% markup from yesterday’s.

    From their FAQ:

    8. Why are rates quoted on the site different than those in the newspapers?
    Rates quoted in newspapers aren’t available to the public. These rates are usually wholesale rates available on amounts of $1 million or more, transferred electronically between banks.

    These “wholesale” rates are the interbank rates, which you can get with CapitalOne.

  16. I found this number for Discover (801-902-3100), but I am not sure if you can call it collect.

    “How do I contact the card service center when traveling outside of the U.S.?

    We are open 24 hours, 7 days a week. While outside of the U.S., you can reach us by dialing 001, followed by the toll number 801-902-3100. Please be sure to retain this number with your travel documents.”

  17. I used to work for Wells Fargo and depending on the type of account you have you get the currency at discounted rates. Also, when people wanted to avoid ATM fees when traveling abroad we would always suggest they use their ATM & Check Card at a bank and do a cash advance off the check card. This way you can get local currency without having to pay any ATM fees and there is no charge to do a cash advance (unless that local bank charges one which would be very unusual). Of course you are subject to your banks exchange rate but its just another option I thought Id throw out there.

    Also, depending on where you travel credit cards may or may not be a good option. We live in Japan (US military) and its a very cash based society. There are many places here that don’t take credit cards. This is also true in some of the poorer countries we’ve traveled to in Asia but that probably goes without saying!

  18. Jonathan, OANDA is a trading site…i dont think u can buy currency with them. Wells Fargo allows u to buy pounds….i dont know where else u can buy pounds here.

  19. If you’ll have internet access during your trip, another option for obtaining cash is to take cash advances from the Capital One credit card then schedule online payments as soon as the transactions show up on the Capital One website (in a day or two). I figured I’d get nicked for a few days’ interest which would still probably cost less than the 1% elsewhere, but the few times my wife and I have tried it we didn’t get assessed any finance charges. (At least that’s my recollection).

  20. I quickly bought when the pound was 1.74…so even with the added cost, It worked out to 1.83

    i dont think there is a better place u can get foreign currency within the US.

    Can you buy interstate currency online? I dont think they exist in midwest.

  21. Re: WF – I was just pointing out that WF is not a good exchange rate. In general, it is difficult to buy hard currency at a good rate in the US. That’s why it is better to simply go to the foreign country and buy using credit card when possible. It gives you the best exchange rate.

    (Sure, you could get a better rate by buying ahead of time. But that’s more currency trading than anything else. You could easily get a worse rate.)

    The FX conversion section of Oanda provides the interbank rate, as well as historical rates as a resource. You can compare rates easily that way.

    Jon in NYC – What some people is simply overpay their account ahead of time so there is a credit balance. But my CapOne card charges a 3% fee for cash advances. Is there one that has no cash advance fee?

  22. great post. As I am preparing to move to Sweden (waiting for residence visa). I have been researching all this stuff quite a bit. i want to reduce the amount of fee’s I might incur as much as possible until I establish banking there.

    I have opened a HSBCdirect account. HSBC is located several industrialized countries and in major cities like London, Stockholm etc… If I withdraw money from an ATM at an HSBC branch than there is no fee to get the cash whatsoever. You just pay the interbank rate that you had referred too. People might be interested in having an HSBCdirect account for the simply reason of moving funds to it while going abroad. Not sure about convenience everywhere but HSBC in Stockholm is very accessible.

    I also use my Capital One card while travelling abroad, although only 24 and it being my first credit card I can’t get the 1% cash back like you (lucky).

  23. Jonathan: ok, i understand what you are saying now. I am going to the UK for school. The school charges 2.5% extra for foreign credit cards. I once had to pay the school £100 to secure my housing. I had no choice but to pay by credit card. The statement on my card read $212.

    I have been watching UK-US for 9 months now. The recent drop was the lowest I have seen, so I quickly bought to secure the exchange.

  24. Business Information Guy says

    This is such a great learning tips. Thank for sharing guy.

  25. Any chance we can get more details on this professional pickpocket in Italy? Sounds interesting and might save us from a similar theft in the future.

  26. Penfed Plat. Visa is a great option for travel, in addition to the CapOne card you mention. Penfed has 1% transaction fee, but that’s canceled by the 1.25% rewards. Also, because of their clientele, I think they are better geared to deal with “overseas” types of problems. I’ve found their customer service reps. to be quite good compared to other major banks/card issuers (which isn’t saying much, I know).

    Also, RE: ATM fees… Bank of America has a partnership with a few global Banks for free ATM transactions. The blurb from their website is as follows:

    Travelling Internationally?

    Use your ATM card or Check Card within our Global ATM Alliance in the countries shown with no fees.

    Barclays (United Kingdom)
    BNP Paribas (France)
    China Construction Bank (China)
    Deutsche Bank: (Germany)
    Satander Serfin (Mexico)
    Scotiabank (Canada)
    Westpac (Australia and New Zealand)

    That’s by no means enough for most travelers, but might help a few people w/ BofA accounts who are going to one of those places.

  27. I never use any ATM card to get cash since DISCOVER card can get get you cash at most grocery stores without any charge and you do not have to pay back till you get the bill.

    Internationally, I use Schwab DC which refunds all charges incurred even by foreign bank ATMs.

  28. Jonathon,

    I couldn’t agree with you more concerning Traverler’s checks! Went to Greece for my honeymoon in June of 2008! and depending where I was – the people looked at me like I was CRAZY trying to pay for anything with a traveler’s check. Even in Athens, they weren’t having it – complete waste of time and effort. I ended up coming home with them and bringing them back to WAMU (which ironically doesn’t charge anything).

  29. CW – PenFed with 1% fee and 1.25% cash back gets you 0.25% net back. Not bad, but not as good as net 1% back from CapOne.

    Story about pickpocketing coming up. 🙂

  30. When I’m traveling to places where the dollar is strong I bring a lot of $1’s and don’t bother with the conversion.

    Also, whatever I travel I call my bank and let them know where I’ll be. This way they don’t see a lot of transactions in an unusual place and put a hold on accounts.

  31. When using Credit Cards in Europe, be sure that they process your transactions in Local Currency…many savvy retailers (I was in Ireland) have machines that can tell you are using an American card, and ‘graciously’ convert to US Dollars [Dynamic Currency Conversion] so you don’t have to deal with their pesky funny money. The problem is, they use whatever exchange rate they want (usually not good), and your home bank STILL charges you an International Conversion Fee, since the transaction occurred in a foreign currency. The receipt you sign indicates you acknowledge you were offered a choice of currencies, but I tried without success in a number of places to get them to reverse the transactions in USD and reprocess as EUR, but most shopkeepers said they didn’t know how to do that.

  32. I’ve found it difficult to get good use of my credit cards abroad, esp in Asia, and parts of Europe (eg Italy) where many places still don’t take credit cards or require a minimum amount purchased.

    I like to eat at authentic hole in the wall type restaurants also, and I can tell you from personal experience that 9 times out of 10 these mom and pop restaurants only take cash.

    Instead, I’ve been using my HSBC atm card with much more success and convenience; I have an HSBC free checking linked to an online savings account. Whenever I travel, I hit up the local HSBC branch to get cash without any fees whatsoever from either my checking or online savings account, and on an as needed basis. A bonus is that I can still leave my cash in my online savings account, while I travel. to continue accruing interest.

    I’ve gotten cash from HSBC in London, Paris, Lyon, Milan, Taipei, Hong Kong, Macau, Tokyo, Beijing, Shanghai, Bangkok, and Seoul without any problems or fees.

  33. @CW: you are still assessed the 1% MC or V transaction cost. I spent an hour internationally discussing this on the phone with Bank of America. They mean no ATM fee when they say “no” fee.

    another good card is USAA.

    don’t mix up your credit card with debit card, b/c you’ll be paying interest right away, a cash advance fee, and international exchange fee for withdrawing cash from a credit card.

    @Mike: I agree, a little research ahead of time will reveal what is and what is not possible. there are countries that only use V and no MC, and even with V you need CAC Visa card. I’d also check your statement, because HSBC had charged 1% and increased to 3% for non-premier customers.

  34. @Tim: Thanks for the heads up. Just looked at my statements and also the atm slips from the countries I withdrew from….no charge whatsoever. =)

  35. Although this doesnt really apply for Europe, I would also advise checking what happens with the local business at your destination too.

    For example, Ive just come back from a trip to Vanuatu.

    Generally the prices are pretty high anyway, but in addition, almost all local business (even the larger internationals) will charge you an additional 5% for using anything except cash – i.e credit cards.

    When you add this too the fees your card will charge you anyway, it makes it well worth getting foreign currency instead.

  36. If you have a Costco membership, I like the American Express Costco card. Travel rebates are 2%, 3% for eating out, 3% for gas and 1% for everything else. Once a year Costco gives out the rebate and you can then redeem it for cash at Costco.

    I have used my AMEX card in parts of Asia and Europe.

  37. USAA ATM card is the best I’ve found. They just charge 0.2% fee foreign currency exchange fee, you get the interbank exchange rate, plus they will refund you the ATM fees charged by the other bank up to $15 per month. It would cost you $0.60 to take out $300. That’s practically free!

  38. Annie@GreenGlobalTravel says

    I remember traveler’s cheques… Complete agree though, I never use them anymore. My mother is more old school and feels the need to bring local currency etc, for my own part I bring my cards. 1 use, 1 backup in case of theft etc. Much smarter and easier way of travel.

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