Unless you’ve sealed yourself in an all-inclusive bubble, you’re going to need to pay for some things while travelling, be they kitschy souvenirs or once-in-a-lifetime experiences. But how to pay for it all?

As Canadians we have a number of payment options, many of them using the new ‘tap and go’ electronic technology, usually with seamless results. However once outside Canada, the same rules don’t apply. I’ve learned about the best and worst payment types through trial and error, but you don’t have to. Here’s my take on the smartest ways to pay on the road.

Cash

Great for the majority of purchases, and depending on where you are, this may be your only choice. My husband and I spent a year travelling and found most street markets, taxis, bars and restaurants were strictly cash only. We always carried some U.S. dollars in a money belt for emergencies. Smaller denominations are best, and make sure they are in good condition without rips or markings.

Credit cards

Since credit cards usually carry a foreign transaction fee of 1.5 – 3%, we only used our card when we needed the insurance and purchase protection. That included booking airfare and hotels, and paying for large purchases (I did once buy a laptop outside of Canada). Some vendors also charge a surcharge of 5% or more for using a credit card. To avoid the foreign transaction fee, we used Canadian travel sites like Expedia.ca or Hotels.ca. And even with a chip card, you’ll probably still need to sign.

ATMs

There are two general ways to access the ATM outside of Canada: with your debit card as a withdrawal, or your credit card as a cash advance. Both have pros and cons:

Debit

The most cost efficient way is to take out the maximum withdrawal allowed on a network compatible with your home network. The fees will vary so check with your bank in advance as not only will they levy a fee of a few dollars, but so will the host bank. Also, you’ll need to check on the withdrawal limit for within that country. Banks may reduce the daily limit (sometimes as low as $100) in countries with a high risk for fraud, and this limit can change. Always carry a backup card in case your card gets demagnetized or eaten by the machine. In the 12 ½ months of travel I did with my husband, not once did we pay using Interac debit.

Credit cards

Generally we found the limits higher, and it came with a flat fee of $5 for cash advances. Good in a pinch, but the best way to get cash from a credit card was to go into a local bank which issued the same credit card (e.g. Visa) and ask for a cash advance. You’ll still pay a small fee and need your passport, but it’s much less than the ATM and you could get large sums for rentals, tours, etc. The trick of course is to go directly to your online banking app and make the full payment, since interest starts accruing right away.

Travellers’ cheques

If you still use these, you’re showing your age! Forget about them and join the 21st century. Not only will you have to go to a bank to cash them, but you might get a bewildered look if you try to spend them.

And now a note from our lawyers…

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