Handling money while travelling

Your money works differently overseas than it does at home, and the difference usually costs you something you never see if you do not look. The good news is that the whole money problem on a trip reduces to a few habits: know what your card charges, never rely on a single way to pay, carry a small amount of cash, and keep a firm budget. None of it is complicated once you set it up before you leave.

Know what your card charges overseas

Every time you use a card abroad, somewhere in that transaction there is a conversion and often a fee. Two costs matter, and they vary a lot between banks and cards:

• A foreign transaction fee. A charge some cards add to every purchase made in another currency. It is a percentage, and it can be substantial or absent depending on the card.
• The exchange rate spread. The rate your bank uses to convert is not the same as the market rate, and the gap is where providers quietly make money. Cards with better rates for travellers usually have a smaller spread.

Before you travel, check the actual terms of the cards you own rather than assuming they are all the same. If you are choosing a card for the trip, our guide to travel money card types explains the options. Whichever you carry, the cheapest card for most spending is the one with the lowest combination of fee and spread, so make that your main card.

Never rely on a single way to pay

Cards get declined, lost, flagged or eaten by machines. Carry more than one independent way to pay:

• A main card plus a backup. Keep them separate, and do not let the backup sit in the same wallet as the main one.
• Notify or check, never guess. Some banks flag overseas use as fraud. Let your bank know you are travelling so the block does not happen mid-purchase, and keep a way to reach them.
• A little cash for emergencies. A modest amount of local currency in a safe place covers you if cards stop working entirely.

If one card fails, the whole trip does not have to stop. The traveller who always has a working second option is the one who never has a money emergency on the road.

How much cash you need

Cards work almost everywhere now, but not everywhere. You still want local cash for markets, small shops, tips, and the places that simply do not take card. The sensible approach:

• Carry a modest amount. Enough for a day or two of the kinds of places that prefer cash, not a thick stack.
• Withdraw in the local currency. If you use an ATM, choose to be charged in the local currency, and withdraw less often in larger amounts rather than many tiny withdrawals.
• Avoid airport exchange desks. Their rates are usually poor because you are paying for the convenience at the exact moment you are most rushed.

Build a daily budget and stick to it

A trip runs over not because of one big purchase but because nobody is watching the small ones. A daily budget fixes that:

• Set a realistic daily total. Base it on the destination and your habits, not a guess. Our guide to choosing destinations that fit your budget explains how the cost of living where you go sets that number.
• Add a buffer. Surprises always appear, and a small contingency keeps them from blowing the plan.
• Track as you go. Check what you have spent at the end of each day or two. A quick glance stops a quiet creep into overspend.

A firm daily target is not restriction, it is control. It is the difference between getting home and being pleased with the bill, or getting home and being surprised by it.