Tips for Spending Money Abroad

Managing Money In a Foreign Country

Currency is used around the world with relative ease.  Anyone showing up with a few dollars can change their papers into a different set of bills before going on a proper spending spree in a foreign market. Having knowledge of tips for spending money abroad is a huge asset.

However, as currencies are exchanged, international transfer fees are tacked on, limitations are put on entry and exit amounts, digital currency is introduced and other bills are so diminished they lose all value, money becomes a much more confusing aspect of travel. Spending money abroad takes a little bit of research and a habitual awareness.

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Cash is King

For roughly 90 percent of the world, Cash is King.  There is no system of payment more widely accepted, useful and hassle free than simply exchanging official papers for goods and services.  

By far, the best way to enter a new country is with a solid wad of cash received from a bank or transfer agency prior to flying.  This has several advantages, including having a fairly set budget, having official, bank-vetted bills (counterfeit currency from international banks are rare), and allowing a person to sidestep exchange fees, transaction charges and other expenses. This also prevents strange international charges from appearing on debit or credit cards while also ensuring that low-tech areas are still able to provide services.

Though it is advisable to go through your personal bank service, keep in mind that some banks don’t have good deals.  They might have charges to transfer money that will be beyond the norm.  Make sure to shop around.

Also keep in mind that some countries have “cash-limits” to how much money you bring in.  If you exceed a certain amount, you may have to declare it.  

By and large, however, cash is the absolute best way to travel. Over ninety percent of the spending money abroad involves cash transactions.

Exceptions to Cash is King

There are times when cash isn’t your best option.  Many first-world countries have undergone a dramatic shift following the Coronavirus Pandemic, where many businesses will only accept exact change or digital transactions.  Though this is far from the norm, restaurants in the United States, UK, Canada, France and other nations often require plastic to pay.  

Another time when cash is inadvisable is if a person is going from country to country very rapidly.  If you are shifting between three or four different currencies in just a week of traveling through SE Asia, a different strategy is likely warranted.  It may be better to do ATM withdrawals with a travel card that doesn’t have any international fees.  

Since every currency transfer results in a loss of money (through either an exchange service fee or the exchange service simply not matching the international values), it is better to avoid transferring money too often. When withdrawing cash, budget beforehand to ensure the amount of money obtained matches what you need for the remaining duration in the country.

Spread Out Your Money

If you are traveling with any amount of cash, never keep all your cash in a single place.  A prime piece of safety advice is to hide cash in various areas, keeping what you need for the day readily accessible.  This goes double for cards as well.  Consider keeping extra, emergency debit and credit cards hidden elsewhere.

My method for spending money abroad uses a few hiding places.  A series of flattened bills are put in the same hidden pocket I keep in my passport under my shirt.  The largest amount of money, including emergency cards, are kept in my medical kit and inside my document case,  which holds paperwork.  My “daily” money and main rewards travel card is placed into a decoy wallet, which is kept in a front pocket.  This decoy wallet is designed to be stolen in case of pickpockets or muggings.  It is also the wallet I open to pay out of, so I don’t have to reveal my real wallet (which is a ultralight card carrier that clips inside my belt). If my travel card is stolen, I can easily cancel it or freeze it via online banking. 

I’ve only been mugged twice in my life, but with this method, I get to keep the vast majority of my assets without potentially upsetting muggers and thieves.  It’s easy enough to simply toss a decoy wallet on the ground and run away.  Even when unsavory people go through my luggage, it’s usually very unlikely that they will look at the bottom of my medical kit or inside my boring paperwork folder.  

Never keep all your eggs in one basket or all your money in one location.  

The Many Sins of Airports

Airports are designed to exploit travelers.  Wait times are calculated to be just enough that people are very likely to eat at the overpriced restaurants and pay for premium lounge services.  

One of the most frustrating things airports do is transfer money.  Money exchange services at airports are the worst in the world.  They vastly devalue the money handed to them and give back diminished local currencies. 

If at all possible, avoid airport exchanges like the plague.  Make sure to have local currency prior to arrival. If you need to transfer money upon arrival in a country, go to a official currency exchange elsewhere, where rates can be verified online.

Keep a Financial App on Hand

Before traveling, it’s wise to download an app like Unit Converter.  These apps accurately tell a person different values across countries, allowing a person to calculate stones to pounds, kilometers to miles and Kelvin to Fahrenheit.  

Most useful of all is the calculation of currency. Apps which are regularly updated to match the international exchange rate can ensure that money transfers are in equal amounts.  

One of the problems with traveling is called “Monopoly Money Syndrome.”  This may happen in a country where currency is vastly overinflated.  For example, a person from the UK might bring their British Pounds to Turkey, where the Lira is used.  In the early 2020’s, a British Pound was worth a little under twenty Lira.  So a person who mentally undervalues Turkish Lira might overspend in Turkey, without realizing that the smaller ratio of currency-to-goods is adding up.

Having a currency calculator app can help ensure that Monopoly Money Syndrome doesn’t cause overt overspending.  

Split Currency into Smaller Bills

Banks commonly hand large bills to people when they travel.  Be sure to explicitly ask for smaller bills in general, especially when traveling to poorer countries.

Smaller bills tend to attract less attention and work much better when paying for goods in areas without large amounts of cash on hand.  For example, convenience stores in the Guatemalan countryside might not be able to accept large Quetzal bills and provide enough change.  

Furthermore, traveling with smaller bills is a good way to prevent scams.  

One of the most common scams in the world involves swapping out legitimate large bills for fake ones, and then accusing the spender of paying with fake money.  This scam can only usually be done with large bills to make the effort worth it.

Another (but less common) scam involves providing fake bills as change.  This cannot be done if a person pays in exact change, negating a relatively common scam.

One of the most tedious scams out there involves the “tipping” method.  A person has a twenty dollar taxi ride and pays with a fifty.  The driver keeps the thirty as a “tip” and when confronted, says you only paid with the exact amount. 

Small bills are a form of security, control and consideration.

Prepaid Cards

Another method for spending money abroad is through use of prepaid cards.  Prepaid cards have a set amount on them, and they cannot be hacked for more.  

A prepaid card is purchased before entering a new country, at which point a person puts a set amount of money on the card.  These usually have no international transaction fees and they’re very secure.  The credit or debit information found on a standard card simply doesn’t exist on a prepaid card.  

This is also a good method for sticking to a budget.  These also serve well as a source of emergency currency.  

The Foreigner Discount

A running joke during my time in China was the Laowai (Mandarin slang for foreigner) Discount.  This “discount” was seen sporadically throughout my time in Asia.  

A man would go in and buy a bottle of water for three yuan.  I would follow, and the bottle of water was suddenly seven yuan, since foreigners are perceived to have more money.  Similarly, water-taxi drivers in Lake Atitlan, Guatemala constantly demand twenty-five Quetzal from foreigners while only charging five Quetzal from locals.  

This isn’t quite a scam as much as it is skeevy opportunism.  To avoid this, always shop in stores where prices are clearly labeled.  If you cannot, ask another customer the price prior to purchase.  (They’ll likely ask the store worker, who is less likely to lie to a local).

Digital Spending

The world has rapidly accepted fully digital currency without even the need of a credit or debit card for purchases.  Apple Pay and WeChat Pay are common examples of this.

There are very few advantages for a traveler using a digital payment method unless they’ve already set it up.  It means that devices need to be extra secure and constantly charged.  

Sometimes, however, Digital Spending can’t be avoided.  For example, it is difficult to function in Mainland China without using the Alipay and Wechat Pay applications, which are linked to a bank account.  In these cases, research the application and permissions very carefully.  Consider attaching a prepaid card to an account to avoid having strange charges arrive via the app later on.  Additionally, bringing an external battery may be wise, since this can charge a dead device when emergency purchases need to be made.  

Credit Card Cash Advances

Many travelers have credit cards.  And many of these credit cards are godsends when traveling.

However, travelers should be very cautious when accepting a Credit Card Cash Advance while abroad.  There are usually additional charges involved, and it may be more difficult to pay off the credit exchange than expected, possibly since the person isn’t in the country to clear up misunderstandings or bills if any occur.  

Travel Credit and Debit Cards

One of the easiest ways to spend money abroad is through Debit and Credit Cards.  ATM withdrawals, direct payments and online payments are all available thanks to these tiny pieces of plastic.  

Debit and Credit Cards are fine to use while traveling, but require a bit of extra prep-work.  Ensure your bank doesn’t have a large number of extra fees when using your card abroad.  If your bank does, look at their travel programs or switch to another bank entirely. 

Likewise, it is also important to contact your bank before traveling so they don’t shut down your card.  Adding extra security to your card while traveling, such as multi-factor authentication, missing-card lockdown options and good offline banking services are all important.

Keep in mind that you may have a problem with your card while spending money abroad.  It might be difficult to call your bank in your home country without international phone services.  It is possible to use a Google Voice number with WIFI to make national calls within your own country to avoid this problem.

Always keep multiple cards for multiple accounts with you.  If one account is locked down, a card is lost or stolen, or there’s an emergency, a secondary card can be a godsend.

If you’re using a debit or credit card to withdraw money, make sure there’s no additional ATM fee from your bank or the bank you are withdrawing from.  

Traveling with a credit or debit card can be convenient, but some extra precautions are warranted.  To recap, here are the things to watch out for on your card while traveling:

• Transaction Fee
• Transfer Fee
• Exchange Fee
• Security Concerns
• Watch out for dynamic charges (charging in wrong currency at high rate)

Spending Money Abroad Considerations

Overall, spending money abroad is easy enough.  The different currencies all work fine and changing them from location to location is easy enough. As modern technology advances, there are more options now than ever for handling money around the world.  

Keep an eye on spending and your monthly budget.  Traveling becomes easier and safer with this mentality. 

Read more about traveling with confusing currencies around the world at the Leftfade Trails Blog

Be secure with your money and safety. Read these articles about safety abroad: