Traveler's Finances
The easiest ways to handle your finances while on holiday
Writer: Beth Chapman

Traveling costs more than just gas, hotel and airfare. There are several other factors, such as activities, bars, clubs, dining out, museums and so on. With so many things to pay for you should ask yourself:

• Should I carry cash or use credit cards?
• What about traveler's checks vs. a traveler check card?

The following information and tips will help you to decide which financial route to take when traveling.

ATM/Check Cards

There are several benefits to using ATM/Check cards, the main two being safety and convenience. In terms of safety, if the card is lost or stolen, it will be replaced, usually without cost to you. Card users are likely to get a better exchange rate compared to those using cash or traveler's checks, and the user will not have to exchange money in each new country visited. Finally, since spending can get out of hand while traveling, managing money is easier with an ATM/Check card.

Credit Cards vs. Cash

Credit cards are widely accepted in developed nations and are becoming increasingly common in developing countires as well. When used wisely, credit cards can be an invaluable financial tool abroad. Beyond giving the user more spending power and favorable exchange rates, credit cards can be a valuable asset during a financial emergency. If a traveler needs instant access to cash, credit cards do the trick. Cash withdrawals usually carry a higher interest rate than regular transaction. Consult your credit card company about interest rates for cash withdrawals. Credit card purchases abroad frequently require a proper ID. Many merchants, in fact, will require you to show your passport to use your credit card.

Carrying some cash is always a good idea when traveling. It can be helpful to obtain a small amount of foreign currency before departure to use for immediate necessities when you first arrive; however, you can change money at the airport or most train stations for a slightly higher rate. If you do get foreign currency ahead of time, do not take out more than $40 to $60. Cash is usually easy to exchange into the local currency, and the exchange rates are usually a little better for cash compared to traveler's checks. Even better, some countries accept the U.S. dollar along with the local currency. The downside to cash: If it's lost or stolen, you are out of luck.

Traveler's Checks/Cards

Traveler's checks, compared to cash, offer more security if they are lost or stolen. To replace stolen checks, you will need the serial numbers. Keep the check receipt with the serial number separate from the actual checks. Traveler's checks come in various denominations and currencies. You will be able to exchange traveler's checks at airports, exchange houses and most banks when you reach your destination. It makes no difference what brand of traveler's checks you buy; all are equally reliable.

Travel cards offer another alternative. Travel cards work just like an ATM/Check card but offer the protection of traveler's checks. Purchase travel cards before traveling and use them at as you would an ATM/Check card.