Personal Finance

Is it better to Use Credit card or Cash when traveling?

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  • Jan 29th, 2018 7:24 pm
Deal Addict
Jul 26, 2012
1429 posts
100 upvotes

Is it better to Use Credit card or Cash when traveling?

Is it better to Use Credit card or Cash when traveling to the USA or Internationally. I am planning to go to Korea and China next month, but I am not sure if I should exchange my money now at bank of China here in Canada, exchange it while I am there, or even at the airport. Should I not even both exchanging at all if I have a amazon visa card?
18 replies
Deal Fanatic
Feb 15, 2006
9183 posts
3861 upvotes
Toronto
It can depend on the places you are going, what you'll be spending money on, and the merchants there. Not all merchants take CCs.

We have Marriott visa card that doesn't charge the 2.5% foreign currency conversion fee. We had pre-loaded it with some money, then at the destination, withdraw money at the airport ATM. There can be a fee (at the ATM), so it should be an amount to make it worthwhile.

Usually you'd still like to carry at least some small amount of cash in local currency, for tips or incidentals, in case you cannot get local cash early enough.

Then try to charge everything to the CC if possible.
Newbie
Jul 16, 2015
24 posts
8 upvotes
Nelson, BC
It's always good to get some local cash exchanged when going to another country. A local exchange place or bank can give you a better rate than an ATM.

Most businesses take credit, but with your amazon card you will be charged 2.5% conversion fee and only get 1% cash back. I would recommend the rogers or fido card with 4% CB on foreign charges. It has the same 2.5% fee, but you still end up with 1.5%.
Sr. Member
Aug 7, 2014
563 posts
243 upvotes
1) Get some local currency before the trip to pay for incidentals.

2) Prepay your Amazon Visa credit card, and withdraw the local currency (say $500) at destination. Spend all your local currency (e.g., pay hotel or restaurant bills) before you leave. If there is still a credit balance at Amazon Visa after the trip, call them to issue you a cheque for the credit balance.

3) Use your Rogers mastercard (4% cashback to cover the 2.5 currency fee) for all your purchases at destination.
Deal Addict
Feb 12, 2010
4578 posts
1999 upvotes
AB
You have to use both cash currency and CC. I usually use CC at hotels, supermarkets & larger stores. The cash for smaller shops, street vendors, tips, etc. This way the cash portion is always a very small amount, but very convenient when needed.
Newbie
Jan 30, 2013
57 posts
17 upvotes
taeyang987 wrote: Should I not even both exchanging at all if I have a amazon visa card?
If you are buying large items... but for daily spending, I will still go with cash. I would get cash from the bank machine when I get there. I find the foreign exchange in Canada will never be as good.
Deal Addict
Feb 12, 2010
4578 posts
1999 upvotes
AB
Forgot to add: for CC I used Amazon Visa. No currency conversion fee and 1% cashback on all purchases.
Deal Addict
Jul 26, 2012
1429 posts
100 upvotes
Is it better rate for purchasing for using the amazon No currency conversion fee compared to exchanging funds for let say at the airport or local bank at the traveling country.
Deal Addict
Jul 26, 2012
1429 posts
100 upvotes
I actually never though or prepaying my credit card first. That's such a smart idea.
So are you saying what I do is for example I pay/put on $1000 Canadian on my Amazon CC and then I can withdraw that money at that country's local currency without being charged a fee, Cash Advance fee or the 2.5% fee that normal credit cards have?

edit: I do see this on some credit cards
"Fee for Cash-Like Transactions: $3.50 each time you conduct a transaction using your account that involves one of the following: money order, wire transfer, travellers cheque, purchase of foreign currency, bets, lottery tickets, or casino gaming chips; $5.00 if obtained outside of Canada."
Sr. Member
Aug 7, 2014
563 posts
243 upvotes
taeyang987 wrote: I actually never though or prepaying my credit card first. That's such a smart idea.
So are you saying what I do is for example I pay/put on $1000 Canadian on my Amazon CC and then I can withdraw that money at that country's local currency without being charged a fee, Cash Advance fee or the 2.5% fee that normal credit cards have?

edit: I do see this on some credit cards
"Fee for Cash-Like Transactions: $3.50 each time you conduct a transaction using your account that involves one of the following: money order, wire transfer, travellers cheque, purchase of foreign currency, bets, lottery tickets, or casino gaming chips; $5.00 if obtained outside of Canada."
Prepaying your amazon visa is to avoid the cash advance fee and expensive interest charges, and amazon visa waives the normal 2.5% fee for foreign cash withdrawal. But, there is generally a $5 per ATM transaction fee, and that explains why I said earlier that u should take out a larger amount, say $500, to minimize the $5 transaction fee.
Deal Fanatic
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Feb 19, 2010
6237 posts
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Arrgh wrote: It can depend on the places you are going, what you'll be spending money on, and the merchants there. Not all merchants take CCs.

We have Marriott visa card that doesn't charge the 2.5% foreign currency conversion fee. We had pre-loaded it with some money, then at the destination, withdraw money at the airport ATM. There can be a fee (at the ATM), so it should be an amount to make it worthwhile.

Usually you'd still like to carry at least some small amount of cash in local currency, for tips or incidentals, in case you cannot get local cash early enough.

Then try to charge everything to the CC if possible.
^This.

Although if one sticks with real banks as opposed to stand-alone ATMs I have found that I haven't paid any additional fees aside from the cash advance amount.

I always take out more than $500 CAD equivalent to minimize the 1% or 5$ minimum cash advance fee. This perhaps works better in places in Europe where the currency is the same across several countries but is also somewhat dependent on how long one might be spending in a country with its own currency so as to be meaningful. Everything generally goes on CC to the extent possible.
Member
Sep 1, 2015
217 posts
159 upvotes
Niagara Falls, ON
visa/mastercard/ae have very little coverage in China,
major accepted payment network in China is Unionpay/Wechat/Alipay.
if you have Chinese friends you can let them help you to load money to a wechat account and just pay with your phone in China.
Visa won't get accepted too much besides big hotels and airport in China
Deal Addict
Mar 2, 2005
2033 posts
334 upvotes
It all depends on where you are traveling. Always "bring" a decent amount of cash with you. If you are traveling to third world and don't want to carry too much of their currency, then carry USD (one bill to own them all ;) ).

Credit cards are handy and convenient, almost necessary for car rental and hotels and are great at that. If you are street shopping or going to tourist sites, cash is always King, I don't care what anyone else has to tell you.

I have travelled to all continents, and this has always worked for me.

Tip: Lock your passport and your regular wallet away, carry nothing more than your ID, "one" credit card, local currency and some USD on top. If you end up in a difficult situation (I have been in some) it will either save your life or get you somewhere.

Good Luck.
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Jan 6, 2011
6190 posts
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GTA
Just realized Visa Intl rate is more than 50bps higher than Master, and Master 30bps higher than GF/XE.

So spreads are being earned and it's less with MC? even when FX conversion fee is $0.
Sr. Member
Aug 7, 2014
563 posts
243 upvotes
finnoob wrote: visa/mastercard/ae have very little coverage in China,
major accepted payment network in China is Unionpay/Wechat/Alipay.
if you have Chinese friends you can let them help you to load money to a wechat account and just pay with your phone in China.
Visa won't get accepted too much besides big hotels and airport in China
Here is the VISA Global ATM locator searching ATM locations in each city for cash withdrawal with his Amazon Visa in Korea and China, where OP will visit.
https://www.visa.com/atmlocator/#(page:home)
Deal Fanatic
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Jan 6, 2011
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GTA
And in China, even if the MC ATM locator doesn't show HSBC machines, they work. It was very hard for me to find an ATM that works with Tangerine ATM card, in downtown Shanghai!!
Member
Jan 4, 2017
366 posts
277 upvotes
It's better to use both. Some transactions are better suited to cash, others to credit. Different societies lean more heavily to one or the other, so like others pointed out it depends where you are. Generally, it's good practice to bring a minimum of two credit+debit cards based out of different institutions/networks, just in case. Withdrawing cash at most ATMs is fine, just avoid numerous small transactions - do one transaction that will last you a while, pay in cash where it makes sense and use the cc for big transactions and anything that can be booked in advance.
Deal Addict
Feb 17, 2017
1318 posts
1145 upvotes
UrbanPoet wrote: I think its best to bring. A combo of cash and cards.
Try to get just enough cash that you need. Bc you can always negotiate better fx rates wth cash. Credit cards for the most part (with very few exceptions) charge an fx fee.

Keep a few credit cards and debit just in case.
It very much depends on the currency. In some currencies your never going to get a better exchange with cash than with a credit card (even with the 2.75% fee).

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