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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