Money For Overseas


Before you head out for your next trip overseas, take a moment to plan best for the money you will need. Get the most for your money when traveling internationally by doing some homework first.

The most important step is to know your options. In the past, traveler's checks were the most popular way to carry money overseas -- but today's travelers are much more likely to rely on credit cards and ATM withdrawals, which usually offer better exchange rates and lower fees.

The Best Way To Carry Money Overseas

David Rentsch

President, Cruise Holidays

What's the best option for you? And how can you avoid those pesky currency conversion fees when making purchases abroad? We answer these questions in a comprehensive roundup of all your currency conversion options when you're traveling overseas.

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Credit Cards

Works Best for: Large purchases such as airline tickets, hotel bills, car rentals and restaurant meals.

The Good: The biggest advantage to using credit cards while traveling overseas is that credit card purchases are exchanged at the interbank exchange rate, usually the best rate you can get for currency exchange. While most credit card issuers charge currency conversion fees each time you make a purchase in a foreign currency (generally 1 percent from Visa or MasterCard plus an additional 1 - 2 percent for themselves), these fees are typically lower than those you'd pay to cash traveler's checks or converting your own currency at a change bureau. And there are a few cards out there (some from Capital One) that do not charge any foreign transaction fees at all, not even the ones from Visa or MasterCard.

The Bad: Some restaurants, stores and even hotels won't take credit cards, so you'll need to have cash on hand at all times. While you can use credit cards to get cash advances at ATM's, bear in mind that they'll be subject to any finance charges your credit card company imposes -- which can add up very quickly. Plus, if you're not home by the time the bills come in and you haven't made arrangements to pay them, you'll be hit with hefty finance charges on these advances.

One problem for U.S. travelers is the growing prevalence of "chip-and-PIN" credit cards in Europe, Asia and South America. Designed to reduce fraud, these cards rely on an embedded chip that transmits information to a merchant, which the consumer then verifies by entering a PIN. While U.S. cards with magnetic stripes will still work as long as there's someone to swipe them, some travelers report problems using their

cards in ticket vending kiosks, at gas stations or in other places featuring automated payment machines. If you find yourself in this dilemma, your only alternatives are to find an attendant to scan your card or to use cash instead.