Tuesday, January 18, 2011

Should you travel with a credit card, a debit card or cash.

When traveling, there are several ways to pay your way as you go. You can use a credit card, a debit card or cash.

When we travel internationally, I like to get cash from an ATM. Most credit cards charge a fee (exception is Capitol One) when used to pay for a transaction in a foreign currency. With my credit union charging only 1 percent on ATM withdrawals, it makes sense for us to pay as much as possible in cash.

But there are limits to how much I can withdraw using an ATM. I ran into a problem during our last trip when I tried to withdraw 400 Euros. Over my daily limit. We had some tours to pay for shortly after our arrival and needed the cash. Fortunately, my husband was able to withdraw the balance we needed using his ATM card.

But what happens when you might still need more cash on a daily basis? A friend on our recent trip, without realizing it, provided me with the solution. She had a pre-paid MasterCard that was loaded with Euros, purchased from Travelex.

As I began to read about the Cash Passport products offered by Travelex something really caught my attention: chip and pin cards. It is possible to buy a Travelex chip and PIN Cash Passport at certain locations within the US.

With the potential problem of using a U.S. magnetic strip credit/debit/ATM card in Europe, as I previously wrote about on this blog, this pre-paid card might just be the solution. Of course there are fees associated with it. And there are not many places where it is offered in the U.S.

However, the Travelex website states that it will be possible to buy the Chip and PIN Cash Passports online early in 2011. This might prove a great solution for U.S. travelers until U.S. banks get their act together and start offering these cards to their clients.

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