4 Rules for Getting and Carrying Travel Money Safely Abroad

To travel safely and manage your traveling cash along the way, you’ll need to balance various risks, including the risk of theft, losing your cash, high fees, and general currency confusion. Getting and carrying your travel money safely depends on travelers actively implementing some rules.

Depending on where you’re going and how you travel, you could very easily be identified as a tourist – an automatic mark for pick-pockets and scam artists. In some regions of the world, full-on muggings are common occurrences, so it pays to think about and implement some rules for getting and carrying your travel cash safely while abroad.

1. Know where to get your travel cash

Depending on where you’re traveling, you have a few options to get travel cash in a foreign country:

• You can convert funds at your home bank and bring foreign currency abroad with you but we don’t recommend this for a lot of cash unless the conversion rate is fairly stable and at a particularly favorable rate when you convert it. Convert a little cash before you leave so you’re not under pressure to convert more quickly upon landing.
• You can carry your home currency and convert it periodically as you travel. This is the best bet if you’re going to be crossing multiple borders and will need access to several different currencies.
• The preferred method, however, is to use the ATMs abroad. You may be subject to a few different fees – depending on your bank – but they’re often comparable to what you’d pay to exchange your currency anyway.

See 4 Places Where you Do Not Want to Risk your Debit Card for important tips on how to protect your cards at ATMs around the world.

2. Know how to convert your cash

To spend cash abroad, it’s necessary to convert your currency to the currency at your destination, and this is true no matter whether you’re using cash or cards. The exchange rate determines how much foreign currency you can get for each U.S. dollar and the rate varies depending on what form of money you are exchanging, i.e., cash versus credit cards, where you exchange it, and when the exchange takes place.

That’s a lot of factors!

Still, the best way to convert cash is by doing a little shopping around to find the best rate. Find a touristy street with lots of competition among multiple currency exchanges and you’ll get a better rate. Don’t be afraid to ask around and go down the street or over a few blocks to get a good rate. Just like when you’re looking to fill your gas tank, pay attention to the posted rates wherever you go too.

Avoid changing cash at these places:

• At your neighborhood bank before you go – they’re not likely to have the best exchange rate and it often takes some time to get the currency simply because they don’t do it that often.
• At the first place you see when you arrive in the new country – the exchange rates at the airport and surrounding areas are less competitive and passengers are a captive market.
• Anywhere friendly locals are offering to exchange your money for you – they’re offering this as a service and even if it’s not a scam, they’re getting something in the middle and it’s coming out of your pocket in the end.

A note on credit cards: many credit card companies offer better – more current – exchange rates than you can get with cash although some charge exchange transaction fees, so be sure to check your credit card rules.

3. Know where to stash your travel cash

The key to carrying your travel money is based on one golden rule: diversify! Carrying all your cash in one place – often a wallet – puts you and your cash at the greatest risk for serious loss if someone snags it or if you drop it along the way.

Expert travelers recommend dividing up your travel cash into three piles each day:

1. The cash you need for the day
2. The rest of your cash
3. A little backup cash

The bulk of your cash should go in a money belt or be locked in your luggage. The cash you need for the day can be divided – some in your pockets and some in a wallet (see How to Prevent Serious Cash Losses with a Fake Travel Wallet). A little backup cash should get stashed in your shoe or some other useful hidden place.

This way, if your wallet is stolen, you still have other cash and your back up cash as well as the bulk of your cash. Plus, there’s not a lot of money in your wallet – making you look like less of a target. If you run out of cash during the day, head to a restroom, lock the door and replenish your supply from your money belt. Tuck everything away again and away you go.

4. Know how to use cash to your advantage

Most expert travelers find using their credit cards while their traveling really is the best and safest way, and yet there are times when you can use your travel cash to your advantage.

Remember, anytime you are looking to make a purchase and you use a card, the vendor pays a premium on those transactions. That cuts into their bottom line. Also, in many countries (including the U.S.) a cash-only deal can more easily go unreported as a taxable transaction (it may not be perfectly legal, but it happens a lot).

Ask the vendor if they’re willing to give you a discount if you pay with cash. You may be surprised to find that many are willing to haggle this way – even in places where haggling is not the norm.

See Why Safe Travelers Love Money Belts for more information on carrying your travel cash safely.