I have spent money in 45 countries over the past six years, and the system I use now is the result of a lot of expensive mistakes. Early in my traveling life, I paid over 200 dollars in ATM fees during a single three-week trip to Southeast Asia because I did not understand how foreign transaction fees worked. The advice here is specific: which cards to carry, which apps to use, and how to avoid the traps that cost travelers billions of dollars each year.
The Core Strategy: Two Cards and One App
The system I use in every country is simple: a no-foreign-transaction-fee credit card for purchases, a no-foreign-transaction-fee debit card for ATM withdrawals, and the Wise app for international money transfers. This combination covers virtually every situation I have encountered, from paying for a hotel in Tokyo to withdrawing cash from an ATM in rural Bolivia.
For the credit card, I use the Chase Sapphire Preferred, which charges no foreign transaction fees and earns 2 points per dollar on travel and dining. Other good options include the Capital One Venture X (no foreign fees, 2 miles per dollar on all purchases), the American Express Gold (no foreign fees, 4 points per dollar at restaurants worldwide), and the Citi Premier Card (no foreign fees, 3 points per dollar on travel). The specific card matters less than the absence of foreign transaction fees, which typically add 3 percent to every purchase made abroad. On a 5,000-dollar trip, that is 150 dollars in unnecessary fees.
For the debit card, I use the Charles Schwab debit card, which refunds all ATM fees worldwide with no foreign transaction fees. This means I can withdraw cash from any ATM in any country without paying fees to either the ATM operator or my bank. In countries where ATMs charge high fees (some ATMs in Thailand charge 200 to 300 baht, about 6 to 9 dollars, per withdrawal), the Schwab refund covers the full amount. Other good options include the Fidelity Cash Management Account, which also refunds ATM fees, and the Capital One 360 Checking account, which charges no foreign fees and reimburses up to 10 dollars per month in ATM fees.
Withdrawing Cash: How Much and How Often
The amount of cash you need varies by country. In Scandinavia, Japan, and South Korea, cash is rarely necessary; almost everything can be paid by card. In Southeast Asia, parts of Africa, and rural Latin America, cash is essential for small purchases, street food, transportation, and tips. As a general rule, I withdraw about 50 to 100 US dollars equivalent in local currency upon arrival at the airport, and then withdraw more as needed from ATMs in the city.
ATM fees and exchange rate markups are the two costs to watch. The exchange rate offered by airport ATMs is often worse than the rate offered by city-center ATMs, because airport ATMs know you have few alternatives. If the airport ATM offers a "automatic currency conversion" option, which allows you to see the charge in your home currency rather than the local currency, always decline it. Automatic currency conversion gives you a worse exchange rate than letting your bank handle the conversion. The same applies to card terminals in restaurants and shops: if the terminal asks whether you want to pay in your home currency or the local currency, always choose the local currency.
I withdraw larger amounts less frequently rather than small amounts often, because most banks charge a per-withdrawal fee (which the Schwab card refunds, but the refund takes a few days to process). In countries where ATMs are scarce, I withdraw the maximum allowed amount (usually the equivalent of 300 to 500 dollars) and carry the cash in a money belt or a front-pocket wallet. In cities with plentiful ATMs, I withdraw 100 to 200 dollars at a time and keep a smaller amount in my wallet. I never carry all my cash in one place: I split it between my wallet, my daypack, and my accommodation safe.
Using Wise for Transfers and Payments
Wise (formerly TransferWise) is a money transfer service that offers exchange rates close to the mid-market rate (the rate you see on Google) with transparent, low fees. I use Wise for two purposes: sending money to myself when I arrive in a new country, and paying for accommodations or tours that require bank transfers rather than credit card payments.
For self-transfers, I open a Wise account in the currency of the country I am visiting, transfer money from my US bank account to the Wise account, and then use the Wise debit card to spend directly in the local currency. The Wise debit card charges no foreign transaction fees and offers the mid-market exchange rate. The transfer fee is typically 0.5 to 1 percent, which is significantly lower than the 3 to 4 percent that most banks charge for foreign currency purchases. I have used the Wise card in over 20 countries and have never had it declined or encountered an issue.
For paying accommodations, some hotels, guesthouses, and tour operators in developing countries prefer bank transfers to credit cards, because credit card processing fees are high. Wise allows me to send money directly to their bank account in the local currency, which is cheaper for them and often cheaper for me than paying by credit card. The transfer usually arrives within one to two business days. I have used Wise to pay for accommodations in Bali, Vietnam, Kenya, and Peru, and the process has been reliable every time.
Budget Tracking: A Simple System
I track my spending daily using a spreadsheet on my phone. The spreadsheet has four columns: date, category (food, transport, accommodation, activities, other), amount in local currency, and amount in US dollars. I enter every expense at the end of each day, which takes about five minutes. The daily total tells me whether I am on budget, and the category totals tell me where I am overspending.
I set a daily budget before each trip based on research and experience. For Southeast Asia, my budget is 40 to 60 dollars per day, including accommodation. For Europe, it is 80 to 120 dollars per day. For Japan, it is 70 to 100 dollars per day. These budgets include everything except flights. If I overspend one day, I spend less the next. If I underspend consistently, I reallocate the surplus to activities or a nicer meal. The goal is not to hit the budget exactly but to maintain awareness of where my money is going.
For travelers who prefer apps over spreadsheets, Trail Wallet (iOS) and TravelSpend (iOS and Android) are both good options. Both allow you to set a daily budget, categorize expenses, and view spending by category and by date. Trail Wallet costs 3 dollars and is the simpler of the two. TravelSpend is free with optional premium features and supports multi-currency tracking. I used Trail Wallet for two years before switching to a spreadsheet, and it worked well.
Avoiding Common Money Traps
The most expensive money trap for travelers is the airport currency exchange. Airport exchange kiosks offer the worst exchange rates of any option, often 5 to 10 percent below the mid-market rate. If you arrive at an airport without local currency, use an ATM in the airport terminal instead. The ATM rate will be better than the exchange kiosk rate, even after the ATM fee. If you must use an exchange kiosk (some airports in developing countries do not have ATMs), exchange only the minimum amount you need to get to your hotel, and then use an ATM in the city for the rest.
Another common trap is the "no commission" exchange booth that advertises zero commission but builds its profit into the exchange rate. These booths are common in European tourist areas and in cities like Bangkok and Istanbul. The "no commission" claim is technically true, but the exchange rate they offer is 5 to 15 percent worse than the mid-market rate, which means you are paying a hidden commission. Compare the rate they offer to the mid-market rate on your phone (Google "USD to EUR" or whatever currency you need) before accepting the exchange.
Automatic currency conversion (DCC) is the third major trap. When you pay by credit card in a foreign country, the payment terminal may ask whether you want to be charged in your home currency or the local currency. Always choose the local currency. If you choose your home currency, the merchant's bank converts the amount at their exchange rate, which is typically 3 to 5 percent worse than your credit card network's rate. Your credit card network (Visa or Mastercard) will handle the conversion at a rate close to the mid-market rate if you choose the local currency. This single choice saves 3 to 5 percent on every card transaction.
Tipping Etiquette Around the World
Tipping customs vary enormously between countries, and getting it wrong can mean either offending someone or wasting money. In the United States, tipping 18 to 22 percent at restaurants is expected. In Japan and South Korea, tipping is not customary and can be considered rude. In Europe, tipping 5 to 10 percent at restaurants is common but not always expected; check the bill for a "service compris" line, which indicates that a service charge has already been added. In Southeast Asia, tipping is appreciated but not expected at local restaurants; at hotels and tour companies that cater to Western tourists, a tip of 10 percent is customary.
For tour guides, a tip of 5 to 10 US dollars per day per person is standard in developing countries and 10 to 20 dollars per day per person in developed countries. For hotel housekeeping, 1 to 2 dollars per night left on the pillow is customary in the US and Canada but unusual in Europe and Asia. For taxi Guide, rounding up the fare is sufficient in most countries; a 10 percent tip is customary in the US.
Carry small bills for tipping. In many countries, breaking a large bill is difficult, and a taxi Guide or waiter may not have change for a 50 or 100 dollar bill. I keep a supply of 1 and 5 dollar bills (or the local equivalent) in my wallet specifically for tips. When I arrive in a new country, I withdraw some cash and ask the ATM for smaller denominations if possible, or I make a small purchase at a convenience store to get change.
