Don’t waste your money while traveling internationally. How to save when going abroad.

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You’re finally taking that big trip abroad.

For as much time and energy you’ve spent saving up and searching for the best deals on flights or cruises, places to stay, and travel experiences, it would be a shame to blow extra money at the last minute. But that’s what you’ll be doing if you don’t use your cash and credit wisely.

“The thing I never, ever, ever recommend doing abroad is (using) your debit card to pay for things unless you're withdrawing money from an ATM,” said consumer savings expert Matt Granite, who’s known as The Deal Guy on YouTube.

Here’s why and what else travelers should know before visiting another country:

Can you use debit cards internationally?

Yes, but Granite strongly discourages using it to pay for anything but ATM withdrawals.

“You've just given a terminal that you are unfamiliar with access to your bank account with a pin. You've absolutely no idea what happens beyond that point,” he warned.

A woman withdraws euro banknotes from an ATM in Zagreb on Jan. 2, 2023. Since January 1, 2023 the euro is the official currency in Croatia.
A woman withdraws euro banknotes from an ATM in Zagreb on Jan. 2, 2023. Since January 1, 2023 the euro is the official currency in Croatia.

Is it better to travel with cash or credit?

Both.

“You generally want cash on you, always, in case of an emergency,” Granite said.

Cash is also useful for gratuities and small purchases. For larger transactions, he recommends credit, provided there are no foreign transaction fees.

“You're more likely to encounter fraud or operators not necessarily giving you what you've paid for when you're in a remote area where you don't know where you are, you don't know who you're dealing with. The potential for a ripoff is a lot higher than where we're on our own territorial ground,” Granite said. “So always use your credit card because if there is a problem, you are not responsible for your purchase. You have coverage. You have fraud investigations. They'll put a hold on a suspicious transaction. You have everything in the world working for you.”

How can I avoid foreign currency transaction fees?

Call your credit card company or look up their policies online before leaving for your trip, and avoid using any cards that charge fees.

How much cash should you travel with internationally?

“I would say that anyone traveling for more than three days in a country should have the equivalent of at least $300 with them,” Granite said.

He suggests the equivalent of $500 for families, adding that it could be less for destinations where the dollar is strong.

“You always need to say to yourself: ‘What do I do if I need to get from an airport to a hotel to pay for one night of the hotel when my credit card is stolen?” he said. “You need to be able to survive abroad for 24 to 48 hours, where your credit card company can emergency FedEx or DHL your (new) credit card to you.”

Where are US dollars accepted?

Several foreign countries use the U.S. dollar as official currency or tender. They include:

Bonaire, St Eustatius and Saba

British Virgin Islands

Ecuador

El Salvador

Marshall Islands

Micronesia

Panama

Palau

Timor-Leste

Turks and Caicos

U.S. dollars are also the currency in U.S. territories like Puerto Rico and Guam. Some businesses in other destinations accept dollars at will.

How to get foreign currency

A man walks past a money exchange shop in Colombo, Sri Lanka on June 26, 2024.
A man walks past a money exchange shop in Colombo, Sri Lanka on June 26, 2024.

There are several ways to get foreign currency before and during your trip. You can order foreign currency from your bank for a fee. You can exchange cash at a currency exchange kiosk, though the exchange rate will not favor you. You can also withdraw cash at an ATM at your destination.

“Another trick that I use is if you are traveling and you do have a credit card with zero foreign transaction fees, you can often get very good exchange rates from both chain and boutique hotels to a limit,” Granite said, explaining that the front desk can give you local currency, then add that amount to your hotel bill like a room incidental. “Not all hotels can, but many hotels, specifically in Europe, will be very pleased to do so.”

Should I get foreign currency before I travel?

You don’t need to, but if you want to, Granite said, “Your bank can definitely give you a wonderful experience, provided the U.S. dollar is stronger before you leave.”

“For example, if you were traveling to Canada, it is 100% in your favor to get the Canadian dollar from the U.S. bank before you travel if the U.S. currency is stronger. But when we're looking at currencies like the British pound, better to do everything when you get to London, not beforehand,” he added.

Where is the best place to exchange currency?

Many travelers prefer to withdraw from ATMs at their destination for better exchange rates, but there are instances when you may opt for a pricey currency exchange kiosk instead.

“Those booths, they're generally in very well-lit areas. They're very secure. They're often in airports or in the mecca center of a city if you are traveling somewhere where you have concerns over your safety,” Granite said, recalling one of his past trips. “I would have gotten a considerably better rate by going to some of the ATMs that were not in areas (where) I should be walking at certain times of the day. I will gladly take the hit of $15 on a $100 withdrawal for safety.”

Consider how much you take out if you use a currency exchange booth.

“Some people will have the concept of they're going to take a little bit and they're going to find an ATM, and then they're going to be OK,” he said. “But the more you withdraw from those places, the rates are generally more within your favor. And there's generally a maintenance or a convenience fee attached to that one transaction, so you're paying $15 whether you take out $5 or $1,000.”

A woman walks past a currency exchange shop in central Tokyo on June 30, 2024, after the yen slid late the week before to its weakest value against the US dollar since 1986.
A woman walks past a currency exchange shop in central Tokyo on June 30, 2024, after the yen slid late the week before to its weakest value against the US dollar since 1986.

Can I withdraw money at a foreign ATM?

Yes, but watch out for fees.

Just like at home, you may be charged usage fees by both the ATM and your bank for withdrawing cash out of network.

You can avoid or limit those fees by sticking to ATMs within your bank’s Global ATM Alliance, Granite said. You can look up banking partners online before you even leave home. Apps like ATM Fee Saver can help you locate fee-free ATMs while traveling.

Be aware that if your bank account normally limits the number of withdrawals you can make each month before incurring fees, foreign withdrawals also count toward that limit, he warned.

He also reminded travelers that ATMs are legally required to disclose fees on screen.

“If you find an ATM you don't like, you can decline. You can take your card out, and then you can walk a block and go to the next ATM,” he said. “I think a lot of people feel compelled – it's a weird psychological thing – that once your card is in the machine, you have to complete your purchase. That is actually not the case.”

Can you withdraw cash on a credit card?

Yes, but you should avoid it.

“Always use your debit card when you're going to an ATM. The credit card fees are horrendous,” Granite said. “No one will ever have a good experience using a credit card and an ATM, and there should be no reason to do so unless your account is completely empty, and by that point you have other problems.”

He also warned that if your debit card is co-branded with a major credit card company, like Visa or Mastercard, make sure withdrawals are made as debit, not credit.

Do I need to notify my credit card of international travel?

Not necessarily.

“Most credit card companies these days, within the last three to five years, have such sophisticated AI on you, they've already known you've booked your trip,” Granite said. “They've figured out somewhere along the way that you have a flight or you have a tour, or you've browsed on their app, something tied to where you're going, and they know you're going.”

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Should I pay in foreign currency or USD?

“Always use your credit card in the local currency,” Granite said. “When you put your credit card into a machine to pay for something and it asks you, Do you want to convert? Never convert.”

How to get rid of leftover foreign currency

The easiest way to get rid of extra foreign currency is to spend it.

“You almost never want to convert it back,” Granite said. “If you do end up with too much cash, which we have on trips before, we'll do things like pay for the balance of our hotel using cash.”

Another option is to hold onto the currency if you think you’ll go back to the destination.

“I find that even if you put that cash into an envelope and it sits in the safe, and you go back three years later, I never forget when I have pounds or euros in the safe based on what it took me to get them,” Granite said.

This article originally appeared on USA TODAY: Cash or credit when traveling abroad? It makes a difference.

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