The safest way to pay when traveling abroad

Ask the Experts: How to spend money abroad safely

I am traveling to Korea this summer and was wondering what is the safest form of money to carry? I do not have a credit card, really do not want one, and usually use a debit card or check for payment. I receive credit card offers all the time, just wondering if this is the safest to use when traveling. -Jan

Hi Jan,

When traveling abroad, you have a number of different money options, all with pros and cons.

  • Cash
  • Credit card
  • Debit/ATM card
  • Traveler’s Checks
  • Prepaid card

No one option is the clear cut best bet for all circumstances. In truth, you’re better off having multiple payment options available, in case one doesn’t work. The key is knowing where you’re going and how you’ll be using your money when you get there.

Cash

Cash is easy to use, but the least secure option. It’s probably a good idea to get at least an emergency supply of cash in the local currency before you leave. It’s not a good idea to get all the money you plan to use in cash prior to leaving. Even if you’ll be primarily using cash where you’re going, it’s safer to bring a little and then find an ATM once you arrive.

Credit card

Credit cards are one of the most secure options for international travel. Major credit cards are usually accepted most places, but not all places. Something to consider: most credit cards in Europe, Asia and South America contain an embedded chip and require the use of a PIN to work. U.S. cards do not work in certain kiosks and automated payment machines because they lack this chip.

Debit cards

Debit cards are also secure, provided you report them missing in the proper timeframe, but aren’t as widely accepted as major credit cards. However, as long as your home bank is connected to a worldwide network (PLUS or Cirrus), you should be able to access your money almost anywhere in the world.

Traveler’s Checks

Once considered to be the most secure way to travel with money, traveler’s checks have fallen out of favor. They’re still safe to use, but depending on where you’re going you might find a limited number of places willing to accept them.

Prepaid card

Merging properties of credit cards, debit cards, and traveler’s checks, prepaid travel cards are a good alternative option to consider. They’re not cheap to activate, load, and use, but they’re secure, usually give you a good exchange rate, and work nearly all places where credit and debit cards are accepted.

So if you’re going to Korea and dead set against opening a credit card, I’d check with your debit card provider to see what issues or fees you should expect from using your debit card as your primary form of payment, and then bring enough cash to get you through should something happen to your debit card. If you do use a credit card (or a debit card), be sure to contact the issuer before leaving to let them know where you’re going. If foreign charges start suddenly showing up on your account with no forewarning, it’s likely that they’ll suspend your account until they’ve spoken to you, which would be majorly inconvenient while traveling abroad.

Hope that helps. Good luck on your trip!

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.