Should I Take Cash, a Debit Card or a Credit Card on My Trip?

Man with wallet
••• Simon Potter / Getty Images

Once you’ve planned your trip, it’s time to get down to the details. You won’t get very far without the means to pay for your travels. If you can’t decide whether to bring along a debit card or a sheaf of travelers checks, consider the pros and cons of the many different ways to pay for your travel expenses.

Let’s look at the pros and cons of each type of travel money.

Cash

Pros

  • Cash is convenient. If you are traveling in your native country, you don’t need to find banks or ATMs.
  • If you’re visiting another country, you’ll probably pay less to exchange cash for the local currency than you would pay using another form of payment.

Cons

  • Cash is a security risk; it can be stolen easily and cannot be replaced.
  • It’s bulky and awkward to carry. You'll need to wear a money belt or pouch.
  • If you’re traveling abroad, you’ll need to visit banks to exchange your cash for the local currency.

Debit Card

Pros

  • A debit card, properly protected, can’t be stolen as easily as cash.
  • As long as your debit card is part of a major network, such as Plus or Cirrus, you can use it in many countries.
  • You can visit an ATM and use your debit card to automatically draw local currency. Conversion and transaction fees will appear on your bank statement.
  • Using a debit card can help you stay within your budget because the card takes money from your checking account. When you're out, you're out.
  • Debit cards are small and easy to carry safely.

    Cons

    • Your debit card may not work in all ATM machines at your destination, so you’ll need to bring a backup debit or credit card.
    • If you travel abroad, your debit card probably won’t be accepted at stores or restaurants. You’ll need to carry some cash for daily expenses.
    • In rural areas, finding an ATM that is part of your network might be difficult. You will need to plan ahead and withdraw enough cash to meet your needs until you are back in a city or town.
    • Using an ATM isn’t free unless you use your own bank’s machines. If you go outside of your bank’s network, you’ll be charged a fee to use a non-system ATM. When you use your debit card in a foreign bank’s ATM, you will be charged separate fees for using the machine and for converting your funds into local currency.
    • You will need to notify your bank that you will be using your debit card overseas. If you fail to do this, you may find that the bank’s anti-fraud department has suspended your debit card, making it impossible for you to use it to get cash.
    • You may need to change your PIN. In some countries, ATMs will not process PINs with more than four digits. In others, PINs with zeroes will not work.
    • You can’t get a cash advance with your debit card. You may wish to bring an alternate form of travel money for emergencies.
    • ATM scams abound. Educate yourself and learn to avoid them.

    Travelers Checks

    Pros

    • Travelers checks are secure; they can be replaced if stolen and require a countersignature for use.
    • You can buy travelers checks in some foreign currencies, including the Euro, British pound, Japanese yen and Canadian dollar.

    Cons

    • Travelers checks can be expensive to buy. You’re normally assessed a service charge, and you’ll also pay a shipping charge if you order them online.
    • Travelers checks can be uncomfortable to carry in a money pouch or belt.
    • If you’re traveling abroad, you will need to go to a bank or your issuing company’s office to exchange travelers checks for foreign currency. You will need to plan your itinerary around banking hours.
    • Not all merchants or banks will accept travelers checks, even those in their local currency. Merchants may charge you a fee if you want to pay with travelers checks.
    • Travelers checks are practically obsolete. Most travelers don't use them.

    Prepaid Travel Cards

    Prepaid travel cards, such as Visa TravelMoney, look like credit cards but function more like travelers checks. You “load” the card with money from your bank account. You use it like a debit card at ATMs and like a credit card at merchants and hotels. You can replace a lost or stolen prepaid travel card like you would a travelers check.

    Pros

    • Travel cards are convenient to carry.
    • Each travel card has a PIN for extra security.
    • Travel cards are a secure alternative for people who don’t have bank accounts or credit cards.

    Cons

    • You’ll pay high fees to activate and load your card.
    • Fees for foreign currency transactions are extremely high. Under some conditions, the fees can be as much as 7% of your total transaction.
    • Travel cards can be difficult to use abroad, especially at foreign banks’ ATM machines.

    Credit Cards

    Pros

    • Credit cards are easy to carry.
    • You can replace your credit card if it is lost or stolen.
    • You can reserve your hotel and rental car on your credit card and your reservation will be guaranteed, even if you arrive late.
    • MasterCard and Visa are accepted at many places around the world.
    • You can get cash advances from ATM machines, for a fee.

    Cons

    • Unscrupulous merchants can steal your credit card information and use your account. You can dispute fraudulent charges and get them removed from your account, but doing so is a long, annoying process. You may need to cancel your card altogether to resolve fraud issues..
    • Credit cards may not be accepted at your hotels and restaurants, so you will still need to carry cash for some purchases and for emergencies.
    • Banks add service fees for foreign currency transactions. Find out what your bank charges before deciding to use your credit card overseas.
    • As with any credit card transaction, you'll pay interest on your travel purchases unless you pay your balance in full each month.
    • You will need to notify bank of your plans to travel to another country before you travel.

    The Bottom Line

    Many travelers choose a combination of two or three travel money options. Before you decide which one will work best for you, call your bank and ask about transaction fees and currency conversion charges. If your bank’s fees are high, consider getting a new credit or debit card for your trip.