Currency Exchange Tips for Travelers: Card vs Cash in 2025

One of the most common questions travelers face before an international trip is whether to carry cash or rely on cards. The answer is not always straightforward, as the best approach depends on your destination, spending habits, and the financial products available to you. In this guide, we break down the pros and cons of each payment method and share practical tips to help you get the most value from your money when traveling abroad.

The Case for Carrying Cash

Despite the rise of digital payments, cash remains an important part of traveling internationally. In many parts of the world, cash is still the primary or preferred method of payment.

Advantages of Cash

Universal acceptance: Cash is accepted everywhere, from street vendors in Bangkok to rural guesthouses in Peru. No matter how remote your destination, local currency in hand will always work.

No transaction fees: When you pay with cash, there are no additional fees at the point of sale. You have already paid any exchange costs when you converted your money.

Budget control: Carrying a fixed amount of cash can help you stick to a daily budget. When the cash runs out, you know you have hit your limit.

Privacy: Cash transactions do not leave a digital trail, which some travelers prefer for personal privacy reasons.

Disadvantages of Cash

Security risk: Carrying large amounts of cash makes you a target for theft. If your cash is lost or stolen, it is usually gone for good.

Unfavorable exchange rates: Depending on where you exchange, the rates can be poor, especially at airports and hotels.

Inconvenience: You need to find exchange offices, count money in unfamiliar denominations, and deal with leftover foreign currency when you return home.

No purchase protection: Unlike credit cards, cash offers no chargeback rights if you are overcharged or receive defective goods.

The Case for Using Cards

Credit and debit cards have become increasingly convenient for international travel, with many financial products designed specifically for frequent travelers.

Advantages of Cards

Convenience: Cards are compact, easy to use, and widely accepted in most developed countries. Tap-to-pay technology makes transactions fast and seamless.

Competitive exchange rates: Credit card networks like Visa and Mastercard typically offer exchange rates very close to the mid-market rate, which is often better than what you would get at a cash exchange counter.

Security: If your card is lost or stolen, you can freeze it instantly through your banking app. Fraudulent charges can be disputed and reversed. Most cards also offer zero-liability protection.

Rewards and benefits: Many travel credit cards offer cashback, points, or miles on international purchases, effectively giving you a discount on every transaction.

No need to carry large amounts of cash: You can access funds as needed without the security risk of carrying a wallet full of bills.

Disadvantages of Cards

Foreign transaction fees: Many credit and debit cards charge 1-3% on foreign currency transactions. This can add up quickly if you are not using a travel-friendly card.

Limited acceptance: In some countries and for small purchases, cards may not be accepted. Street markets, small restaurants, and rural areas often operate on a cash-only basis.

ATM fees: Withdrawing cash from foreign ATMs can incur fees from both your bank and the ATM operator.

Dynamic currency conversion traps: Some merchants offer to charge your card in your home currency instead of the local currency. This almost always results in a worse exchange rate.

Finding the Right Balance: A Hybrid Approach

The smartest strategy for most travelers is a combination of both cash and cards. Here is a recommended approach:

Before Your Trip

1. Get a no-foreign-transaction-fee credit card: Cards like the Chase Sapphire, Capital One Venture, or similar products eliminate the 1-3% foreign transaction fee. This alone can save you hundreds on a longer trip.

2. Notify your bank: Let your bank know about your travel plans so they do not flag your foreign transactions as suspicious and freeze your account.

3. Exchange a small amount of cash: Convert enough local currency for your first day or two, covering transportation from the airport, tips, and small purchases. You can get this from your local bank or an online currency exchange service.

4. Check your destination's payment culture: Research whether your destination is card-friendly or cash-dependent. Scandinavian countries are nearly cashless, while many Southeast Asian countries are heavily cash-based.

During Your Trip

1. Use your card for large purchases: Hotels, restaurants, shopping, and tours typically accept cards and give you the best exchange rate through your card network.

2. Withdraw local currency from ATMs as needed: Use your debit card at local ATMs to get cash at competitive rates. Withdraw larger amounts less frequently to minimize per-transaction ATM fees.

3. Always choose to pay in local currency: When a card terminal asks whether you want to pay in the local currency or your home currency, always choose the local currency. This avoids the unfavorable dynamic currency conversion rate.

4. Keep a backup payment method: Carry a second card from a different network (e.g., one Visa and one Mastercard) in case one is not accepted or gets blocked.

5. Use cash for small vendors: Street food, local markets, tipping, and small shops are where cash shines. Do not force a card transaction where it is not welcome.

Currency Exchange Tips That Save Real Money

Compare Rates Before You Go

Use a currency converter tool to check the current mid-market rate. This gives you a baseline to evaluate any exchange offer. If a provider's rate is more than 2-3% away from the mid-market rate, look elsewhere.

Avoid Airport and Hotel Exchanges

Airport currency exchange counters are among the most expensive places to convert money. Their rates can be 5-15% worse than the mid-market rate. Hotels are similarly expensive. Plan ahead and exchange through banks, ATMs, or online services instead.

Use Fintech Apps for Better Rates

Services like Wise, Revolut, and similar fintech platforms offer exchange rates very close to the mid-market rate with minimal fees. Some provide multi-currency debit cards that let you hold and spend multiple currencies from a single account.

Be Wary of "Commission-Free" Offers

Exchange offices that advertise "no commission" often compensate by offering a much wider spread on the exchange rate. A seemingly free service can actually be more expensive than one that charges a small, transparent commission with a better rate.

Watch Out for Double Conversion

If you are traveling through multiple countries, avoid converting your home currency to a third currency and then to the local currency. Each conversion incurs a spread, so try to convert directly when possible.

Special Considerations by Region

Europe

The eurozone is very card-friendly, and most places accept contactless payments. Carry some cash for small cafes and markets. ATMs (look for ones operated by major banks) offer good rates.

Asia

Cash remains important in much of Southeast Asia, while Japan, South Korea, and Singapore are increasingly card-friendly. In countries like Vietnam, Cambodia, and Myanmar, cash is essential.

North and South America

The US, Canada, and major Latin American cities are card-friendly. In rural areas of Central and South America, cash is king. US dollars are sometimes accepted alongside local currencies in some countries.

Conclusion

The card vs cash debate does not have a single winner. The best approach is a thoughtful combination tailored to your destination and spending habits. Use cards for large transactions to benefit from better exchange rates and rewards, carry enough cash for situations where cards are impractical, and always be aware of fees and exchange rate markups. With a bit of preparation, you can stretch your travel budget significantly and focus on enjoying your trip rather than worrying about money.