Travel and money is a topic that has evolved tons since I started traveling. The first time I went abroad on my own was during my study abroad to Hong Kong in 2009. Looking back, it’s incredible to see how much my process has changed. I remember that my parents offered me travelers checks to bring. I remember saying, “What does a travelers check even do?”

I haven’t heard the term ‘travelers check’ in the last decade, which goes to show how far travel and money has come. In a time where we manage bank accounts and pay bills online and in a time where credit is so much more widely accepted all over the world, money management while traveling has changed quite a bit!

One of my favorite parts of traveling these days is the fact that I can use credit while abroad, and sometimes it’s even astonishing how widespread the use of credit cards is in major cities very far from home.

I also really enjoy updating my money strategies year by year; for example, even five years ago I was still using my ATM cards and paying hefty fees for ATM withdrawals in Ecuador, Bolivia and Guatemala. Today (and thanks to sharing strategies with Dan) I’m getting reimbursed for those same fees. Read on, as I answer seven big questions about money and travel.

Should I bring cash in USD on my trip?

In short, yes. You should bring cash in USD (or your home currency) with you on your trip as backup currency in case you wind up with a malfunctioning credit card or ATM card.

Bring some fresh bills from home

I have always had some crisp USD twenties or fifties in my wallet when I left home for a trip. Having this money has come in handy for exchanging, visas upon arrival and sometimes, a national park entrance fee (charged in USD) here and there.

While living in NYC, I would go to a bank on my lunch break several days before leaving the country for an international trip and would request $200 or so worth of twenty-dollar bills, requesting super crisp ones. I would have these with me, stashed away in a secret and unassuming part of my luggage, in case I needed to use them for exchanging.

Why crisp bills matter

The reason for getting super crisp twenty-dollar bills is that banks abroad don’t typically accept smaller denominations. I’ve experienced sometimes that banks will turn away bills that are less-than-perfect. For visas on arrival (Zambia and Zimbabwe, to name two countries with this policy off the top of my head), you will also need cash, and such visas must be purchased with perfectly un-damaged bills.

How do I find out and track foreign exchange rates?

I personally think foreign exchange rates are fun and interesting. They are like a gamble of their own, and I find exchange rates and fluctuations over time to be fascinating.

Getting familiar with exchange rates

I first had to get familiar with foreign exchange rates when I lived and worked in Shanghai, China. While working there, I was paid in US Dollars due to an agreement in past years with American staff hired from abroad. I worked in China during the first year when the Chinese Yuan started slipping in its rate with the US Dollar, and this hurt my salary.

The Americans who worked at my school would race to the bank on Fridays after pay day to request conversions of our USD into Chinese Yuan for spending, as soon as possible, as the rate would slip day by day. If we didn’t act fast, we’d lose our hard-earned money to the fluctuation.

Nowadays, I look at exchange rates when I travel. There are some places, like Hong Kong, that have currencies pegged to the USD. This is interesting as well because, at any given point, you can go to Hong Kong and presume that the rate won’t have changed much (unless something totally unexpected happens). I follow currency rates around the world so that I can think up places to go where my dollar will go further.

Researching currency fluctuations

When I went to South Africa in summer 2016, I lucked out big time. Somewhat fortunately for Americans, the South African Rand weakened a whole lot that year. This caused our US Dollar to have almost two and a half times more buying power than only two years before. I was eating steak dinners and having South African wine for $25 and having cocktails at restaurants for $3.

Right now, the same thing is happening in Argentina, a place where the economy affects the currency a whole bit. When I went to Argentina in 2017, the exchange was approximately 14 Pesos to a USD, and now it is 38. This means Americans have 2.7 times the buying power we did two years ago.

Tracking foreign exchange rates over time

To track foreign exchange rates, use XE.com and the XE.com app for my phone. The mobile app is free, and you can choose nine of your favorite currencies to track against your home currency. The rates update immediately, and you can also look into the charts that are available to show currency changes over time in one-day to ten-year intervals.

What do I do about getting local currency when I travel?

There are several ways to get local currency. I’m going to list a few ways!

Ask around in your network for foreign currency

First, you can always ask on Facebook if anyone in your friends network has the currency of where you are headed. When I went to Portugal (or was it Spain?) in 2016, I posted on Facebook, “Does anyone have Euros they don’t need?” I got several replies and met up with a friend who had leftover Euros from a previous trip.

I landed in Europe armed with Euros so that I didn’t have to get to an ATM so immediately. I like to land in a place with local currency so that I can take an airport taxi into town or buy some snacks in case (worst case scenario) the ATMs reject my ATM card.

Get foreign currencies at your home bank

A second way to get local currency is to head to a bank and ask if they have Euros, Pesos, Yuan or Yen, etc., in stock. For currencies that are rarer (Sri Lankan Rupees, Peruvian Soles, Vietnamese Dong… to name a few), your chances are a bit slimmer. Sometimes, you can request these in advance from a bank and they can let you know how soon they can receive them for you to exchange before you leave.

Withdraw local currency when you land

The last few ways to get local currency of your destination happen when you land. Upon arrival, you can withdraw from an ATM with your ATM card in the airport. When withdrawing from ATMs abroad, you will typically get charged a fee by the foreign bank (and maybe your bank as well). To avoid this, you can use a bank that reimburses foreign ATM fees.

Exchange at a bank when you arrive

Although I do not recommend doing this, as per the benefits of the methods mentioned above, you can also exchange your home currency for local currency at a bank when you land. Please do note that you may receive a less-than-optimal exchange rate. If you’re going to be potentially exchanging money at banks abroad, make sure your bills are crisp, clean and undamaged!

Should I use my credit card when I travel?

If you have a credit card that waives all foreign transaction fees, then yes - you should use your credit card when you travel!

Call your credit card company before you leave home

One of my favorite things to do before I leave for a trip is to call my credit card company, talk to a human, and let them know which countries I’ll be in, so that they do not flag my purchases as fraud and block my usage. It pays to take care of this beforehand so that you don’t have to deal with issues when you leave your country and may not have a way of making calls.

Getting the daily exchange rate on credit

You’ll also get the conversion at the daily exchange rate when your purchase posts. I try to use credit whenever possible (this is because I’m very driven to use credit in order to get points and miles with my credit cards!).

Acceptance of different types of credit cards

In my experience, Visa is most widely accepted worldwide.American Express and Mastercard are accepted somewhat outside the US, but it is always best to have multiple credit cards. Some stores or restaurants may turn away Visa, and if you have multiple types, you’ll have another option.

Transaction fees on credit

When using credit, ask in local businesses if there is an extra charge for a credit card transaction. In several hostels and hotels in different parts of the world, I’ve experienced being quoted a 3% transaction fee for using a credit card. Sometimes I’ll change my mind and use cash, or sometimes I’ll go with the fee if it’s not turning out to be too hefty.

Using credit abroad and leaving tips

One more consideration is the use of credit in cafes and restaurants. In some countries where credit cards are accepted, tip is not included in your bill and can’t be added after the transaction. If you want to leave tip on card, you have to remember to tell your server to add 10% or 15% (depending on local norms) as they are processing the transaction.

Choose the local currency

In my experience, if you have a choice of USD or EUR, for example, when your credit card is in the reader, pick the foreign currency. You will nearly always get a better deal. I always avoid choosing US Dollars in these instances, and I’ve even done the math after making the mistake of picking USD that I had lost out.

What do I do about foreign transaction fees and ATM fees?

I haven’t been charged a foreign transaction fee in my lifetime, and you shouldn’t be being charged them, either. For traveling, open a credit card account that has travel benefits like no foreign transaction fees. We both use Chase Sapphire Reserve and we’ve now started using Wells Fargo Propel card as well.

Use a checking account that reimburses ATM fees

For ATM fees, as I mentioned above, I no longer get charged those, either. Dan introduced me to an Investor Checking account with Charles Schwab that reimburses me for ATM fees every thirty days. The Fidelity Cash Management account also has a system of automatically reimbursing the account holder for any ATM fee charged by foreign banking institutions while abroad or traveling.

With these types of accounts, I see reimbursements for these in the next month for any ATM fees charged to my card when I withdraw. I recommend saving your ATM withdrawal receipts until you get refunded in the following month.

How do I budget travel spending during my trip?

There are lots of ways to budget spending during your trip. For one thing, there are lots of ways to save money while traveling and my favorite way is to check out what the typical cost of travel is for the place you’ll be going.

Check out a travel pricing index

The Price of Travel Index is one of my favorite websites to peruse. Did you know that Hanoi, Vietnam, ranks #1 for the lowest price of daily travel in Asia? You can find out that type of data at this site.

Calculate spending along the way

If I’m traveling for a while, I’ll stop and take some time to calculate how much I’ve spent so far. I tally the price of my flight or flights, and then separately, I’ll tally the amounts of money I’ve withdrawn from ATMs, purchases made on credit card and any money spent on the trip before I left (price of foreign travel visas or related fees).

Figure out your spending average

Based on how I want to calculate my daily spending average, I take these fees and divide by the number of days I’ve been on the road.

What’s interesting to see is how things like rental cars factor into your trip and blow out your daily average. When Dan and I traveled around Ireland, the cost of our rental car for a week accounted for a giant portion of what we spent during the whole trip. If you are on a tight budget, consider scrapping a rental car and going with public transport.

What do I do with my extra foreign currency after traveling?

When your trip is ending, deciding what to do with your foreign currency is a valid thing to think about! If you have only a little bit left, you can spend it at the airport on gifts for friends and family, or some delicious snacks for the flight or a souvenir you’ve been wanting.

Save foreign currency for future trips

If you have cash in a widely-used currency like the Euro (used as official currency in 23 countries!), consider saving your EUR for a future trip to any other country in the Euro-using destinations. You can also save currency for your friends, if you know you have a friend who will be going to a particular destination within a few months!

If you travel somewhere where the USD is the official currency, like Ecuador, Panama or Cambodia… you’re in luck! You can go home with those dollars in your wallet.

Ask around in your network

If you wind up with any foreign currency and you know you might not be going to that specific country for another few years, ask around in your network to determine if any friends or family are headed there soon and might want to buy it off you.

I’ve done some pretty funny street exchanges in giving away my Colombian Pesos or Indian Rupees in exchange for the equivalent in a Venmo payment. To buy money or transfer money to others travelers, you can use Venmo (for US bank accounts only) or PayPal (used worldwide).