Destination TBD

| Money Matters |

ATMs, traveler's checks, credit cards, cash... what should I take?

There are a lot of ways to get money overseas: ATM withdrawals, cash advances on a credit card, traveler's checks, and good old fashioned cash. I left the states with an ATM debit card, 2 credit cards, traveler's checks ($1000.00), and several hundred dollars in U.S. cash (large bills).

What would I do different? I'd take more traveler's checks. They're a great way to (quickly) get a large amount of cash... several times I needed to purchase plane tickets and paid an extra 3% for using a credit card or had to make multiple ATM withdrawals over several days because of my bank's daily limit.

ATM Cards
ATM withdrawals are a convenient way to get money and you often get a better exchange rate than changing cash for foreign currency at a bank. I relied on my ATM card most of the trip, but there were times when it wasn't possible: Cambodia and Laos don't really have ATMs, for example, and for a period of one month in Thailand, my card didn't work because of problems at home with my bank. Luckily my ATM card is also a debit card and I was able to take a cash advance without the finance charges associated with a regular credit card.

A big downside to using an ATM card is the bank's usage fee. I was charged $5.00 for every withdrawal I made. And it adds up. Also, daily withdrawal limits are occasionally inconvenient.

They say it's best to have a 4-digit pin while traveling overseas. To be on the safe side, change your pin before leaving home if it's longer.

Credit Cards
Credit cards are good to have in case of emergency and for occasional splurges, although I hardly used mine – Asia is a cash society. Many travelers use them for cash advances when there aren't ATMs, like in remote locations and while traveling developing nations without ATM infrastructure. However, most credit companies apply a high finance charge to cash advances and the issuing bank may charge its own fee on top. It can be very expensive to travel on cash advances.

Also - unlike the States - in Asia, using a credit card for any purchase often includes an extra fee (usually 3%). This is in addition to your bank's finance charge. It's better to use cash to avoid the extra fee, although sometimes it's impossible - or inconvenient - to pay with cash.

Traveler's Checks
Traveler's checks may sound outdated in today's world of plastic transactions, but they are handy for locations without ATMs, for pricey purchases (like plane tickets you'd rather not charge because of extra fees), and because checks in large denominations usually get good exchange rates (better than cash). In many countries, banks will add a 2% or 3% fee for cashing the check. For example, you might pay $2.00 to exchange $100.00. All in all, it's cheaper to pay the fee to cash a traveler's check than to pay your bank's ATM usage fee.


© 2006, Cheryn Flanagan