Summary: Even though credit cards have become a popular means of payment while traveling abroad for many people, there are still certain limitations that prevent them from providing the same level of convenience and security as using physical currency notes. Continue reading to know more about it.
Going on a trip abroad is super exciting! But don’t forget about handling your money smartly. While credit cards are handy, it’s not always the best option. Here’s why having some cash on hand is still important!
The Hidden Drawbacks of Relying Solely on Credit Cards Abroad
Despite the convenience and accessibility offered by credit cards, there are still several reasons why foreign currency notes remain a more reliable and preferred form of payment.
1. Limited Acceptance in Remote Areas:
While credit cards are widely accepted in many parts of the world, there are still instances where they may not be usable. Remote or less developed areas, street vendors, and small businesses may only accept cash payments. Simply put, cash remains king in many corners of the world. Carrying foreign currency notes ensures you can make purchases wherever you go, without relying solely on card transactions.
2. Technology Isn’t Foolproof:
In today’s digital age, we rely heavily on technology for seamless transactions. However, gadgets can falter, and connectivity can goof up, leaving you stranded at the checkout counter. Card readers may malfunction, or internet connections can drop, disrupting your plans. In such moments, the simplicity and reliability of cash come to the rescue, ensuring you can still make payments even when technology lets you down.
3. Cash for Emergencies:
Imagine reaching into your wallet, only to find your card missing. Even the most cautious traveler isn’t immune to lost or stolen cards. In certain regions, card skimming scams are more prevalent, where criminals steal your card information through compromised card readers. In these frustrating situations, cash becomes your backup. It ensures you can still purchase essentials like food, transportation, and other emergency payments until your card situation is resolved.
4. The Everyday Convenience of Cash:
Think of those spontaneous moments that make an overseas trip special – taking a taxi or a local bus to explore a new neighborhood, enjoying delicious street food, or purchasing tickets for a local attraction. Many of these everyday experiences still rely heavily on cash. Don’t miss out on the spontaneity because your wallet lacks traditional currency notes.
5. High Transactions Fees:
Using credit cards abroad often incurs foreign transaction fees, which typically range from 1.5% to 3.5% of each transaction. For frequent travelers or those making numerous small purchases, these fees can become significant. Having cash on hand allows you to avoid these fees and potentially save money during your travels.
6. Budgeting Benefits:
Using cash can help travelers stick to a budget more effectively. With cash transactions, you have a real representation of your spending since you can physically see how much money is left with you. This makes it easier to track expenses and avoid overspending. With credit cards, it might be easier to overspend without realizing it until you receive your statement.
What is the Ideal Way to Carry Foreign Currency?
Carrying both currency notes and a card (preferably a forex card) in a particular ratio is recommended. The ratio can vary on the destination country. Say you’re traveling to the US or Europe, which are cashless countries. You can carry 90% of your travel money on the card, but keep 10% in cash for small ticket purchases such as train tickets, taxi fares, or a quick meal. Similarly, for countries like Vietnam or Indonesia, cash may be required in a greater proportion, e.g., 30-40 percent, since card payments are less common.
Moreover, you should only use a credit card abroad if you are going there for a very short period, and if exchange rate fluctuations are not a significant concern for you. Otherwise, getting a forex card is highly recommended if you plan to travel abroad. They provide the best savings, especially to those who will be living abroad for an extended period since forex cards are not affected by fluctuations in exchange rates.
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