Managing day-to-day spending on the road

| July 8, 2010 | 17 Comments
atmcards Managing day to day spending on the road

Managing day-to-day spending on the road

In most regions of the world, international ATMs are the best way to manage money while abroad. They are convenient, safe and often provide the best exchange rate—discounting, of course, their sometimes exorbitant service charges. This is generally the cheapest and most convenient way to get cash in the local currency.

Travellers cheques—a dying breed

Increasingly overlooked by card-wielding travellers, travellers cheques are a dying breed. Five years ago, travellers cheques were the preferred means of payment by most international tourists, equal in importance only to cash and more widely used than debit cards. However, with the exponential growth of ATM cards and the emergence of e-commerce, travellers cheques are now facing a slow death as the impact of other newer technologies is felt around the globe. That being said, travellers cheques do have their place—especially where ATMs can’t be found and can serve as an excellent form of back-up, especially as you can claim a refund if they’re stolen (provided, of course, that you’ve kept a separate record of their numbers). However, they can prove to be costly and even worse—a pain to use.

The two-account system

Therefore, ATM use is much more practical and, in our opinion, the way to go. In order to manage your budget—and for added security—we recommend using a two-account system. You likely already have a day-to-day chequing account—one from which you pay bills and make purchases.

We recommend opening a second bank account or a savings account and one for which you do not receive a debit card. It should be accessible only for online money transfers and deposits. We use ING Direct and are very happy with them—but there are a lot of options available. An online savings account has the added advantage of being accessible from anywhere you can log in and usually boasts industry-best interest rates.

The benefit of automatic money transfers

Because it gains solid interest, this account should hold the bulk of your savings—from which you’ll transfer money into a day-to-day account on a periodic basis. We schedule transfers monthly. It isn’t always possible to reach a computer when you need one on the road, so be sure to schedule automatic payments between the accounts if you can. The real advantage, here, is that it creates a wall between your savings and your spending. With an account at a bank completely separate from your primary bank, you can’t just make a big withdrawal on a whim. This will help you better control your spending on the road—and provides additional protection if your debit card is compromised. A side note—remember to get a four-digit PIN for ATM and Visa cards (some foreign ATMs only accept four digits).

Beware the cost of service charges

Always consider the cost of fees when you open additional accounts. Your day-to-day account should have free debit card and ATM withdrawals and your savings account should offer free online transactions.

We suggest that you limit the amount of money you keep in your day-to-day chequing account to a reasonable amount. Therefore, if your debit card and/or PIN number are compromised while you are on the road, your entire savings account is not at risk. To keep ATM fees low, you will want to withdraw more cash than you immediately need. But beware of carrying too much cash on you, as the risk of theft is, of course, ever-present.

Tips and Warnings

  • Make copies. It’s prudent to make photocopies of the fronts and backs of all of you ATM and credit cards that you bring with you. Leave a set behind (with someone you trust and can reach easily when abroad) and stash the other set somewhere separate from the originals —a lock box at your hotel or guest house. If you lose your wallet or purse, the photocopies will provide you with the necessary information to call your credit card company or bank and get things worked out quickly so that you can enjoy your trip. See more information here, in our article entitled: “Travelling Safely: Before You Go”.
  • Don’t stuff your pockets. Don’t carry too much cash around. Using your credit or ATM cards while on the road is a safe and convenient option, so there is no need to have large amounts of cash on you.
  • Read the fine print. Check your bank’s terms and conditions. In particular, be sure to check the small print regarding ATM transaction fees and currency conversion charges. Make sure your card has the Cirrus, Plus or Maestro symbol —otherwise you may not be able to use it while on the road.
  • Consolidate withdrawals. If you’re making ATM withdrawals, reduce your fees by making fewer (yet larger) withdrawals rather than lots of small transaction (but don`t carry around too much cash). Find the perfect balance!
  • What’s the password ? Make sure you have a 4-digit PIN code for your card, since longer codes don’t always work in other countries. And remember, ATM keypads in other countries are not likely to have roman letters on them. Keep this in mind if your PIN code is word-based!
  • Let them know! Let your bank know that you’ll be travelling overseas to prevent the bank from restricting access to your account


How do you handle money matters while you’re traveling abroad? Does anyone out there still use travellers cheques? Do you get a little foreign currency before you leave, exchange money at the airport or just try to hit the nearest ATM as soon as you arrive? Share with us your money strategy!

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About the Author ()

For nearly ten years now, Daniel of Two Go Round-The-World has explored how travel captures our imagination and engages our deepest emotions. One half of the duo that maintains the widely read Two Go Round-The-World blog, Daniel treats his subjects not only as works of art but also as symbols of the cultural and political forces that inspire them. Check him out on Google+.

Comments (17)

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  1. ayngelina says:

    Because I’m on the road alone I went for the ‘get many accounts option’ with half my money in one account and the remainder at another bank. I’ve been caught a few times with a city that just wouldn’t accept one bank so it was good to have a back-up.

    Also agree about scanning and emailing yourself all the cards. I was robbed once and wanted to report it to my bank but didn’t know the phone number (on the back of the card) or the card number!

    • Daniel says:

      Thanks for the comment, Ayngelina—it’s good to have perspective from somebody’s who currently on the road! Hope everything is well!

  2. Erin says:

    We agree that it’s best to have the bulk of your savings in savings accounts (we have a few to maximise interest) and move it on a monthly basis to your current account. Choose a current account with the lowest fees possible (Nationwide in the UK) and if possible get two debit cards for it in case one gets lost or stolen. We just withdraw money when we arrive in a country.

    We also have credit cards for backup, as well as some dollars for when ATMs aren’t available. We have a few traveller’s cheques too – just in case!

    • Daniel says:

      Again and again I hear good things about Nationwide in the UK — I wish we had an equivalent here in Canada! Thanks for the input. It’s always great to hear people’s experience whilst on the road!

  3. Adam says:

    We did the exact same thing as Erin on our RTW. Great tips though as this was one thing we stressed about before leaving. Everything always worked out all right whenever there were any hiccups, but we were glad we had the second card from a second bank whenever we had problems with our main bank.

  4. Neil says:

    Travelers cheques don’t have their place, I’m afraid. They’re so rarely accepted that they’re useless as a backup payment option. In my experience, if there’s no ATM, there’s nowhere to cash traveler’s cheques either. Even 4 years ago, the traveler’s cheques we carried on our big trip were a big pain, and most of them came home with us.

    But the last time we tried them, it was terrible. I’d bought Traveler’s cheques to avoid duplicate exchange fees. – The long story is that we were visiting Ecuador, a USD country, and had converted a lot of money in advance to take advantage of a good exchange rate. But you cannot connect an ATM card to a Canadian bank account denominated in foreign currency. Converting back to Canadian dollars to be able to withdraw USD from an ATM would have come close to wiping out the exchange gain we made.

    So traveler’s cheques it was, and every attempt to cash them required running around town, as even in the big cities, there was generally only a single exchange office that would cash them, and often the tellers in banks and cash-only exchange offices wouldn’t know where it was. Hours were spent on this. Never again.

    The only backup to cards is cash. A hidden stash of USDs or – some places – Euros.

    • Daniel says:

      Great insight, Neil. Always appreciated. I guess it’s been too long since I’ve travelled outside of North America. When in Asia in 2001–3, I didn’t encounter any problems with traveller’s cheques — but I realize that the industry has changed quickly! I’m glad that it’s all about debit cards and ATMs these days. Back on the aforementioned trip to Asia, using ATM cards was tough because there weren’t a great deal of them. I see that’s changing, too!

  5. Emma Field says:

    Top tips in this post, thanks guys.

    We took cash stashed in small denominations throughout our luggage, credit card – made sure it would earn us some air miles ;) – two debit cards each plus a to Travelex Cash Passport Cards, which were really useful. Online banking was essential too.

    We had no problems in South America, but India was a different case. We told our bank (Lloyds TSB, UK) that we were going to be in India as their policy is to automatically block a card if it’s used there. They refused to stop the automatic block, telling us that we’d need to phone from India to get our card unblocked after trying to use it. Real pain in the arse, especially as it happened repeatedly. The Travelex card and the credit card turned out to be invaluable.

    • Daniel says:

      Thanks, Emma. As always — updates from folks who are currently on the road are great! I found that ATMs were easy to find in Peru. I’ve been told that Scotiabank — a Canadian bank — is pretty ubiquitous in South America. Interesting that Lloyd’s gave you such a hard time — they must have experienced a great deal of fraud? When we were last in India—2002—I think I relied on traveller’s cheques mostly. And can’t really remember coming across too many ATMs. Again — thanks!

  6. Christine says:

    I highly recommend Capital One credit cards because they don’t charge any overseas transactions fees. I use my Capital One card and then pay online with my regional bank account. Great system so far!

    • Daniel says:

      Are Capital One cards available to Canadians? Oh — indeed they are (just checked)! Check ‘em out here, all. Thanks for the recommendation, Christine — much appreciated.

  7. Emily says:

    Great tips! I always take my debit card and a few credit cards (from different banks) with me while traveling in case one of my banks accidentally locks my account for possible fraudulent activity. I haven’t ever had any problems until a few months ago. I was in Istanbul; I used my debit card to withdraw a small amount of cash from an ATM every day or two, and then used my credit card for larger purchases (Like Christine, I used my Capital One card most often since it’s the only card without foreign transaction fees). Shortly after returning home, I found out that someone used that credit card to purchase a $2,000 airline ticket!!!! Thank goodness they refunded me…

  8. Brian Searl says:

    Great article.. All too often travelers plan the details of the trip and often overlook how best to handle their finances. It’s amazing how many people do exchange currency at the airports when there are better and cheaper options available.

    Personally, unless we are just passing through, we always try to exchange currency at the local banks as they tend to provide the best exchange rates. We also setup separate accounts to protect ourselves both from impulse buying and theft.


  9. Great tips! I think a lot will vary on which county one starts from and what kind of trip one is on.

    We are on an open ended, non-stop world trip as a family, so had to make up some of our own ways of handling money. We do have a capital one card ( and others) but almost never use credit cards.

    We use several banks including ones that are off shore and ones that allow us to use many currencies. By paying close attention to currency levels we saved a ton of money by mostly getting out of the US dollar before we left in 2006 and using things like the British pound when it was high ( and getting out of it before it fell). That helped allow us to travel cheaply in Europe when the dollar was so low and the euro and pound high.

  10. Marta says:

    we have been using our debit card all the way through our rtw trip. we also carried on us a credit card but never used it. as many adviced we kept the major of our money in a saving account and, only the minimun necessary for a week trip, in the current one and transfered each time needed it.

  11. Lily says:

    These are all great tips! I am planning a big trip and was not sure how to manage my accounts/money… thanks for sharing :)

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