Euros, Pounds and Yen: Managing Your Money While Traveling Overseas

Traveler's Checks

Traveler's checks are all but obsolete - it's become commonplace these days to use your credit or debit card when traveling overseas. At one time, American Express was the biggest issuer of traveler's checks although the company discontinued them several years ago. You can still obtain them from Visa, AAA and Citicorp bank, among other places. The biggest advantage of traveler's checks is that they are accepted just about anywhere - even where ATMs may be scarce - and you are also insured against loss or theft. The big disadvantage is that you don't typically get a good rate of exchange, especially if you use them to pay a merchant rather than cashing them in at the local bank. Dual-signature checks can be signed by and used by either of the two designated users. Despite the fact that traveler's checks seem to be going the way of the record player and the analogue TV, some experts still advise that you should have a few with you when you travel - just in case.

ATM and Debit Cards

Most savvy travelers use ATM and debit cards to make purchases overseas. The money is simply deducted from your bank account as it would be back home. You don't have to worry about finding a bank, handing over traveler's checks or what the exchange rate happens to be. In fact, ATM cards generally give you the best exchange rate and value for money; your purchase is simply converted at whatever the exchange rate happens to be that day. By the way, you should alert your bank(s) that you will be using the card while overseas; otherwise, they may put a block on the card if they see unusual spending activity.

Of course, you will probably want to have some cash on you while traveling overseas - for a cup of coffee, tipping or a taxi fare. If you need some cash while overseas, you should still use an ATM to withdraw money. ATMs can be found just about anywhere, including all airports; most of them have clear instructions in English and virtually all of them belong to one of the two major networks that will accept your card - Plus and Cirrus. Both have over a million ATM locations worldwide. The Plus network is linked to Visa; the Cirrus network to MasterCard, so as long as your card has one of these logos, it should work in an overseas ATM. If you happen to be somewhere where there is no ATM, a card with the Visa or MasterCard logo should allow you to withdraw money from any bank as a cash advance, should you be in dire need.

If your next business trip is taking you to Europe, the euro (currency code: EUR) has greatly simplified the business of money in Europe. As of now, seventeen countries in Europe use the euro, meaning no more losing out when currency is exchanged between countries; and it's also a lot easier to compare the costs of things. The UK is still stubbornly resisting the euro, along with various other countries, although their days may be numbered.

Beware of Fees and Charges

Although using your ATM/debit card is the easiest way to access and spend money overseas, it may not be completely free. Some US banks will impose a foreign transaction fee - usually an amount between $1 and $5 or a small percentage of the withdrawal amount. It therefore may be less expensive to make a few larger withdrawal amounts, rather than a lot of smaller ones. Many ATMs in foreign countries - especially Europe - won't recognize a pin number that is longer than four digits; and most will only let you withdraw from your primary checking account, rather than from a savings account or line of credit.

You may encounter a situation in which your card can't be used at all. Some European countries have recently introduced cards that have an embedded chip in them and use a pin number. Some business travelers in Europe have reported that some stores, hotels and restaurants won't accept a card issued by a US bank as there is no embedded chip. If this happens to you, you should insist that the merchant try the purchase again; make sure you have a contact number for Visa or MasterCard in the event of a problem.