Protect Your Money While Travelling

Travel abroad is exciting, but managing your money safely and in different currencies can be a challenge. How can you travel smartly and still enjoy your adventure?

"Technology has created more options to help people handle their money when they travel," says Chartered Accountant John Friday, Director of Management Services at Children's Centre Thunder Bay.

"Bank machines, debit cards, credit cards and traveller's cards are the new currency, each with advantages and disadvantages. You should use the method that suits you best and makes sense for the type of trip you are taking."

"Security is always an issue so plan ahead," explains Chartered Accountant Daren Raoux, Senior Tax Manager, Deloitte & Touche LLP in London.

"Talk to your bank before you go. Get advice about the availability of bank machines in the country you're visiting. Trying to resolve issues can be difficult from abroad so carry the contact numbers for your bank and credit card company with you, in case of an emergency."

Should you travel with cash or plastic?

According to Friday, a good rule is to minimize the amount of cash; taking only the amount you're comfortable with carrying.

"Don't buy volumes of currency you won't use. Some currencies cannot be redeemed at home, and you will pay another fee when you sell it back. Carry enough cash to cover incidental costs such as taxis, buses, admission fees, small meals and tips.

"A credit card is ideal. It provides a record of your expenses, doesn't tie up your funds and, depending on the card, may also award points. To avoid interest, pay your card off by the due date and, if you're travelling for an extended period, arrange to make payments on time so the card is not cut off. As a fallback, you can always get cash advances on a credit card, for a fee," advises Friday.

"If you're not comfortable with a credit card, debit cards are still safer than cash. In North America, many hotels will take debit cards. If you decide to use cash, pay for your room when you check in. Keep your valuables in a safety deposit box, or don't take them at all."

Friday also explains that a traveller's credit card is an excellent alternative to traveller's cheques.

"A traveller's card is a prepaid card that is available in many currencies, safer than cash, convenient to use, and even accepted at some bank machines."

Raoux advises that your trip will be all the more enjoyable if you do some contingency planning.

"You never know where your credit card will end up, so take sensible precautions. Clean out your wallet – you will only need a couple of credit cards. Use the well-established international cards. Make copies of your cards; leave a set at home, and take copies with you. It's wise to notify your bank and credit card companies that you will be travelling. Security is very high these days, and you don't want your cards to be cancelled because of unusual spending patterns. In some countries or areas, it may be easier to travel with cash so consult a travel agent on this.

"When you are using a bank machine, stand across the street and check out the location first for anything unusual. Before you enter your card, feel along the edge of the slot to make sure that it has not been tampered with, and that your information cannot be swiped when you use the card," cautions Raoux.

"Use a money belt for your passport and credit cards. Carry some cash in your pocket, and never put your wallet in your hip pocket."

Planning ahead and setting a budget will also help you enjoy your trip.

"Estimate your spending needs and stick to them," says Raoux.

"Factor in the conversion rates in your host country, and prepay whatever you can, including hotels and tours, by credit card."


For more information contact a Chartered Accountant.

Brought to you by the Institute of Chartered Accountants of Ontario.