Show Me the Money

Show Me the Money

2017 Travel Tips – Part 2

By Roger Ward, CPA/PFS, CFP®

In my last blog post, Travel Tips for the 2017 Travel Season, I covered the importance of an up-to-date passport. This week, I’ll share the best ways to pay for goods and services while traveling abroad and the best way to obtain the local currency.

When my wife and I traveled the world 20 years ago, we carried Travelers Checks, selectively used our American Express card and traded currency on the black market if the official rate was artificially inflated.

Fortunately, for today’s travelers, you have better options available; but I want to share a few pre-travel steps to ensure access to cash without unnecessary fees and expenses.

How to Pay While Traveling

In general, paying with your credit card makes travel easier and more convenient, but unfortunately, while using your cards overseas, you may get charged the following fees:

  • International transaction fees
  • Currency conversion fees

Prior to traveling, contact the bank that issues your credit card to find out what it charges for international card transactions. You can find cards that charge no international transaction fees by visiting the website nerdwallet ( or searching the web for “credit cards with no international transaction fees.” Your local credit union may also offer low or no transaction fee cards.

Sadly, your new chip-cards could also cause trouble while traveling (even though chip and PIN technology has been available outside the US for a while), because U.S. banks use different technology from those overseas. In most cases, the different technology won’t cause issues, but at some unmanned payment terminals may require a PIN to process transactions. Even though you likely won’t need it, go ahead and request a PIN from your card’s issuing bank. Since the bank must mail this to you for security reasons, make sure to request it well in advance of your trip! Read this article from the Rick Steves travel site ( for a detailed discussion on chip and PIN technology,

Finally, you can also use your debit card, but as with credit cards, check with your bank first for potential fees.

How to Get Cash While Traveling

While you may use your card for the majority of purchases, you can’t always avoid using cash, particularly with smaller merchants. An ATM is your best source for cash, but ATM withdrawals can also come with fees. For example, your bank may charge a $2-$5 flat per transaction fee, a currency conversion fee, and an international transaction fee. Make sure to check with your bank to discover which fees it charges.

Of course, you can avoid fees by using a debit card such as the Charles Schwab Bank card. Because the Schwab debit card rebates all ATM fees whether generated in the US or overseas, it has become my go-to card while traveling. If you are concerned with the security of a debit card because it is connected to your checking account, you can restrict the account to only your travel budget.

Other Means of Getting Local Currency

Convert Cash at Money Changer

The currency exchange rates at money changers are typically worse than those at ATMs. These transactions are often advertised as “fee free” but the fees are usually factored into the exchange rate.

Cash Advances on Credit Cards

This may be the most expensive way to get cash. Before you use a cash advance on your card, find out the fees to avoid any surprises.

Travelers Checks

Travelers Checks are still an option but the exchange rate received are not as favorable as those received through ATM transactions. Also, many merchants, particularly smaller ones, will not accept them.

Pay in Dollars or Local Currency?

In a relatively new trend, merchants have started to ask if you prefer to pay in dollars or the local currency. Many travelers feel more comfortable paying in their own currency but that is a mistake. The exchange rate for the conversion into dollars is at an unfavorable rate compared to the rate charged by your bank when it makes the conversion. Always pay in the local currency.

If you are getting cash from an independent ATM not affiliated with a bank (often labeled Travelex, Euronet, Cardpoint, etc.), you also may be offered the same opportunity — charged in dollars or locked into your conversion rate. In any case, you do not want to convert. You want to transact in the local currency. It is always a better deal for you.

Final Tips

Review currency rates before traveling and download a currency conversion app to your phone, such as XE Currency. Also, and are two helpful websites to add to your Favorites.

Compile the contact phone numbers for all of your cards and keep them with your important travel documents. If you have a problem or lose your card, you want to address the issue quickly without searching for those numbers.

In Summary – Best Practices

  • Use a no-transaction fee credit card for purchases while traveling
  • Use a fee-free or fee-rebated ATM card to obtain cash from ATMs
  • Know the PIN for each of your cards
  • Always transact in the local currency for the best rate
  • Carry the contact numbers for your card issuing banks
  • Let your bank know your travel plans

Roger Ward is a Principal at TrueWealth, LLC, a wealth management firm located in Atlanta, GA. He has more than 25 years of experience helping clients simplify the complications that come with managing wealth. He can be reached at or 404.487.0404.

© 2017 TrueWealth, LLC (TW). All rights reserved. Any use of information contained in this blog post, including reproduction, modification, distribution or republication, without the prior written consent of TrueWealth, is strictly prohibited. We have taken all reasonable care and precaution to ensure that the information is fair and accurate, or has been compiled from sources believed to be reliable. Nevertheless, we do not make any representations or warranty, express or implied, as to the accuracy, completeness, or fitness for any purpose or use of the information. The information may not in all cases be current and it is subject to continuous change. Accordingly, you should not rely on any of the information as authoritative or a substitute for the exercise of  your  own skill  and  judgment  in  making  any  investment  or  other  decision.  Any references to rates of return are for illustrative purposes only and should not be construed as an estimate or guarantee of future performance. We shall not be liable for any direct, indirect, or consequential loss arising from any use of or reliance on the information from this brochure. The recommendations developed by TrueWealth are  based  upon the  professional  judgment  of TrueWealth and  its  individual  advisory  affiliates  and  neither TrueWealth nor  its  affiliates  can guarantee the results of any of their recommendations. Clients at all times may elect unilaterally to follow or ignore completely, or in part, any information, recommendation, or advice given by TrueWealth and its affiliates.