How much cash should I carry when travelling abroad?

The world may be moving in a digital direction but cash is still king in many countries. If you need to buy things anywhere in the world, the merchant will almost assuredly take cash, even if they don’t take your Visa. Having cash when you travel can make things a lot easier; you don’t have to worry about a merchant accepting your card, you can avoid foreign transaction fees, and you can make faster transactions.

Physical cash can, however, make you a target for thieves and it can be lost. So how much cash should you carry around when you’re travelling abroad? Additionally, what are some things to keep in mind as you hit the ATM before your flight? We answer these below.

How much cash should I bring?

The amount of cash you will need very much depends on where you’re going and what you think you’ll be doing. If you’re headed to western Europe, for example, you may not need to carry as much cash as if you’re headed to a more rural country like those in east Asia or Africa. This is due to the fact that you will almost assuredly come across merchants who accept credit and debit cards in western Europe, but perhaps not in rural Africa. A good rule of thumb, though, is that, on average, you should plan to carry between $50 and $100 per day in the currency of the country in which you’re travelling.

As with all things, research is your friend here. Understand where you’re travelling and what the local customs regarding cash are. Tipping isn’t customary in much of the world, but where it is, service staff often prefer and outright expect a cash tip versus an amount added to the bill. It’s become a kind of second nature to whip out your debit or credit card to pay for that bottle of water at a convenience store or candy bar at a street vendor. However, this isn’t the case in many countries where transaction fees for cards are expensive.

In addition to having the currency of the country in which you’re travelling, have some Canadian dollars on hand as well. These can go a long way in an emergency and, if needed, you can exchange them for more local funds. It’s best to carry this cash in a well-secured, separate area; if you’re staying in a hotel with a safe, consider using it. Larger bills are also preferable to smaller bills as merchants will reduce fees for exchanging currency if the bills are larger. Travel insurance can also protect you from loss or theft as well as other travel emergencies. It’s worth it, especially if you’re travelling to a less developed nation.

Where do I get cash when headed abroad?

There are a few ways you can get cash in the currency of the destination when you’re heading abroad. First, most large banks will have some of the most common currencies on hand. These often include American dollars, Mexican pesos, British pounds, and European euros. Many malls and travel hubs also have dedicated currency exchange shops. These shops will charge a fee for exchanging currencies, which can be between 1 and 3% of the value of the currency. You’ll also have to pay the difference in the value of the currency.

Let’s say you want to exchange $100CAD for $100 Euros. As of this writing, your $100 will only get about €69. If you visit a currency exchange shop, you’ll have to pay a fee as well, generally on the amount you sought to exchange, so you’ll be paying around $103CAD for $69 Euro.

You can also visit the ATM in the country in which you’re travelling. Here, you’ll get cash in the currency you need right away, but you’ll have to contend with a few fees as well. First, you’ll have to pay the fee to use the ATM itself. Sometimes, large banks have agreements with other large banks where fees are waived, but this isn’t always the case. Second, you’ll have to pay a foreign transaction fee with your bank, often between 2 and 3%. There are some accounts that offer no transaction fees, so if you travel frequently, consider this as an option. Finally, you’ll also have to pay the exchange rate. Generally, your bank will automatically select the best exchange rate of the day when they complete the transaction.

Why use a card over cash?

There are a few reasons that it may be preferable to use a card over cash when travelling, if possible.

Fees

There are simply a lot of different fees to pay when you’re using cash as opposed to a credit card. There are a number of credit cards that have zero foreign transaction fees and will offer you the best rate of the day for your exchange. Many credit cards will also waive what's called the network convenience fee. This is a fee charged by Visa, Mastercard, or a similar company, for the convenience of using their network. Cards will get around this by actually paying the merchant in foreign currency on the front end of the transaction, as opposed to taking Canadian currency, exchanging it, and then paying for the product or service. At the end of the day, what you end up paying is only the exchange rate.

You don’t have to worry about any hidden fees with KOHO cards or accounts. Straight-forward pricing means you can keep more of your money in your pocket.

Exchange rate

As we mentioned above, cards, whether they be debit or credit, will often offer you the best rate of the day. This means that if you buy an espresso and gelato in Rome at 9:00 am local time for €5, you’ll get charged the most advantageous exchange rate, regardless of when it occurred, say, at 6:00 pm local later that day.

Safety

If you’re carrying around a bunch of cash and, in particular, flashing it around as you use it, you’re a target for thieves. Cards can also be stolen, but they can be frozen and replaced very quickly if needed.

Ease

If you use a card as opposed to cash, you don’t have to worry about exchanging currency back to your home currency when you return home. This saves time and money because you won’t have to pay conversion fees twice; when you convert Canadian dollars to foreign currency and when you convert foreign currency back.

How to keep cash safe and other tips

Prepay

If you’re visiting tourist attractions, you may want to consider prepaying for tickets and passes. Doing so will help you plan, but also keep the amount of cash you need to carry on your person down.

Keep it hidden

This goes without saying, but it’s not a great idea to run around with cash in your hands. Make sure you keep your cash in a front pocket or secure location and separate it into smaller amounts so it can’t all be stolen or lost in one fell swoop.

Tell your bank

Wherever you’re travelling, be sure to alert your bank and credit card companies. Financial institutions take foreign transactions seriously and if you don’t note that you’ll be outside Canada, your transactions may be declined.

Prepaid

Prepaid cards are also a great way to control spending while travelling and keep fees low. Moreover, if you lose a prepaid card, you can simply get another! The ultimate safety package. KOHO has a number of great options that can fit nearly any need.

How much? As much as you need.

A good rule of thumb is to carry $50-$100 a day in the local currency while travelling. Remember, though, that cash may not be the best option to pay for travel expenses. Credit cards offer great rewards, lower transaction fees, and can help you get a better exchange rate. Be sure you have a firm understanding of where you’re going and how cash is used there before you go.