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Cash or Charge: your travel wallet options

For many years, one of the last things you did before taking an international trip was to go to the bank and purchase American Express travelers checks—hoping you bought the right amount and that stores where you were going would accept them. Well, those days are pretty much over, and options today are much simpler.

Getting cash and making purchases while traveling is now easier than ever, thanks to international banking agreements and the wide acceptance of credit cards. You can now exchange for local currency and purchase everything from an evening cocktail to expensive local handicrafts as easily as you would at home, with a few exceptions. And with the Euro—the currency of choice in much of Europe (at least for now)—traveling between countries does not always mean another trip to a bank or currency exchange.

Some easy tips for travel spending:

  • Before you leave home, let your credit card/debit card companies know when and where you will be traveling, so they will not deny unusual purchases. Most banks let you do this online or by calling their customer service number.
  • Find out if your credit card company charges a foreign transaction fee when purchasing internationally. There are many banks now going fee-free, and many cards with special travel benefits as well.
  • Check to see what features your credit card company includes; a free checked bag, travel insurance, concierge assistance for reservations or assistance, purchase protection, and many other services may be available.
  • Get a small amount of the local currency before you leave home, generally enough to get you to your hotel and buy a cup of coffee or breakfast—especially if you arrive early in the morning. Try to stay away from currency conversion kiosks at airports or in hotels, as they typically charge high fees and offer poor conversion rates.
  • When exchanging currency in a foreign country, be aware most large foreign banks belong to networks, like STAR or PLUS. These networks will allow you to withdraw money at their ATMs just like you do at home—with a similar fee. Generally, the first screen, once you insert your card into the machine, allows you to choose English as your preferred language.
  • When making purchases overseas, always ask for the charge to be made in the local currency, this ensures you get the best conversation rate (the interbank rate). If the merchant offers to convert it to U.S. dollars, you may pay more.
  • Most of Europe, and recently Asia and South America, use "chip and pin" technology. If your bank has issued you a card with a chip, ensure you know your pin and how to use it. It's a much more secure technology—hopefully, the U.S. will complete the switch soon.
  •  Remember to save your receipts so you can declare items when you return to the U.S. The current duty-free exemption is $800 per person.