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Traveling? Cash, check, or credit . . . what's best?

When you travel, the best currency to carry depends on where you are and how remote is your location—although you'd be surprised where ATM machines are located these days. Still, it's wise to consider before you go whether you need cash, traveler's checks, credit cards, or a combination for your trip.

Traveler's checks

These are issued by all major banks, and are the equivalent of cash. You pay a small fee to purchase and insure them (about 5% of cost). When you use them, simply sign on the dotted line, and hand them over to the retailer. You'll get your change in the local currency, which gives you local money to spend without having to exchange it at a bank. There are some drawbacks:

• Small, local retailers can be reluctant to take traveler's checks; they often want cash and can be suspicious of alternative forms of currency.
• You will almost always get local currency in return, and you can often lose on the exchange with your US dollars.
• They can be stolen and used—and they're not always quick or easy to replace.
• Although $20 denominations seem small in the US , these are huge amounts in some countries. Be sure you get your traveler checks in small amounts such as $5 dollar amounts.

Credit cards

These are perhaps the best option if you're traveling in well-developed countries. Few popular tourist resorts will not take a credit card. As well, if you need to make a phone call, most countries have international telephone stations where you can use your credit card. But there are still some considerations:

• If you're traveling in remote regions, your credit card may not be accepted—or a huge fee will be added.
• They can be stolen and used, and, even though you're not responsible for more than $50 in charges, it's still a nuisance. Always be sure that you and your traveling companion carry alternate cards and monetary resources.
• The theft may lead to identity theft, which is a much greater concern, and can have severe consequences for you.

Using your credit card abroad can be expensive. International phone calls can impose minimum fees—up to $50—which you won't know until you get the bill. As well, you won't know what other transaction fees and exchange rates are being applied to your spending until you get your statement. It can make budgeting your trip a bit difficult.

ATM cards

ATM cards cost about the same as traveler's checks—about 5% of your cash request. This is pretty steep, but you're paying for convenience and speed. Again, when you're in a rush, or you don't want to deal with a foreign bank, ATMs offer a convenient alternative. But, like all forms of money when you travel, there are some considerations:

• ATMs can shut down for service and updates, or just break down.
• ATMs sometimes, quite inexplicably, won't accept your PIN.
• ATMs are widespread, but they're not everywhere. They're found in almost all Western Europe, the Middle East and Asia, but you'll be hard pressed to find an ATM outside the major cities in Central or South America .

In the end, when you travel, here are some tips if you head outside the typical tourist range:

• Don't count on any one source of money, and cash is probably best. Still, carry a credit card, ATM card, and cash.
• Carry very small denominations—ones, twos, and fives, at most.
• Be sure your cash is impeccable. Cash that's torn, written on, color stained, or otherwise imperfect will probably not be accepted by locals or even the local bank.

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