When traveling internationally, keeping your money secure is important. Being stuck in a foreign country with no money and possibly no way home is a scary situation that I wish upon no one. Therefore, we need to make sure to take the proper steps to ensure that our money is safe and secure, no matter where we are in the world.

Credit Cards

Credit cards, in my opinion, are an absolute must when traveling abroad. They are the most secure form of payment, are accepted globally in most major establishments, and often offer exceptional customer support if an issue arises. Kelsey and I recommend carrying at least two cards in case one is lost, stolen, or stops working.

Foreign Transaction Fees (FTF)

Whenever you make a transaction outside of the United States, banks charge you a percentage fee to carry out an international purchase. These fees range anywhere from 1-3% which can add up quickly over the course of your trip. Therefore, it is in your best interest to look for a card that waives these transaction fees for their customers. Kelsey and I carry our Chase Sapphire Preferred card, as it offers no FTFs and actually gives us 2% back for all travel and dining related expenses.

For example, Kelsey and I recently visited Whistler Blackcomb in British Columbia, Canada, on a ski trip. Looking through our expenses, we spent about $4,000 USD on transactions in Canada. If we had been charged FTFs, we would be looking at nearly $100 in fees, dollars that we spent instead on some very good local food and brews.

Chip-and-Signature

If you have seen a credit card with the small gold rectangular microchip embedded on the face, you’ve probably wondered what the microchip adds to the card. Surprisingly, the microchip technology has been around for nearly 20 years and has been utilized in Europe and Asia for the majority of that time. However, it is just now making its way to the U.S.

What the chip does is fully encrypt the communication between the credit card and a POS terminal or ATM. This security technology prevents malicious skimming of data off the card, as all information is stored on the encrypted chip. Furthermore, many foreign countries use what’s called chip-and-pin technology. Instead of signing your receipt like you commonly do today in the U.S., you enter a 4-digit PIN number similar to a debit card to finalized your transaction. This adds yet another layer of security that is not available stateside. Unfortunately, all but one of the current U.S. credit card offerings are chip-and-signature, so we will have to wait for the chip-and-pin security measure.

When traveling abroad, having chip-and-pin/signature security makes transactions less complicated and reduces the likelihood that a transaction will be declined. Therefore, it makes more sense to have the chip-enabled credit card from the beginning to avoid this issue.

 

Debit Cards

Similar to credit cards, debit cards offer additional security compared to carrying around large sums of cash. However, there are major disadvantages that debit cards bring compared with credit cards when spending money outside of the states.

Liability

First, not all debit cards carry the same liability protection as credit cards. According to the FTC, cardholders can be held liable for up to $500 of fraudulent activity if not reported within two days of the transaction. For someone on vacation, checking your account regularly may not always be an option.

When you make a debit card transaction, you must remember you are withdrawing from your checking account and tapping directly into your cash. If your debit card is compromised, your access to your cash is possibly lost and a thief may be very quickly cleaning out your account.

Therefore, using a debit card to make purchases overseas is not recommended and should only be done if there is no other option available. Rather, we recommend you only use your debit card to make ATM withdrawals for cash. Also, make sure to keep a keen eye on your bank account when you are able periodically throughout your trip to catch any suspicious activity as early as possible.

Cash

Cash is the least secure form of payment, both domestically and overseas. However, many times you will find vendors in foreign countries who often do not accept major credit cards as form of payment. This is true for many local shops and street vendors. These vendors are often the best places to find great deals and tasty food, so you do want to keep some cash on you for these situations; however, this should be the exception and not the rule.

Kelsey and I recommend bringing enough cash for a day or two of spending on your trip. This is usually enough to get by until you can find local ATMs, which tend to offer favorable exchange rates compared to locations in airports. If you stop at an ATM, withdraw cash for a couple days of spending so you avoid multiple ATM withdrawals (and their associated fees), but still avoid having so much cash that it’s a major liability.

Conclusion

Overall, credit cards are your friend when it comes to traveling outside of the U.S. If you do not have a credit card, look for a card that doesn’t charge foreign transaction fees, such as some of our favorites listed below.

Credit cards also limit your liability and allow you the flexibility to make large purchases in the event of an emergency without tapping into cash resources. Hopefully these guidelines will give you a greater sense of peace and security the next time you hop onto a plane. Safe travels!

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