How to take money when traveling – Credit, debit and cash cards

There is a question I ask every reader when they join the email list: What is your biggest difficulty when planning a trip?

To my surprise, most of the answers are about budget. 

I'm going to write specifically about how much it costs to travel to some of my favorite destinations, but in the meantime there's a post here on the blog explaining how to calculate your travel budget. Today, however, I want to answer your questions about taking credit card, debit card or cash.

I will explain the advantages and disadvantages of each one, and also give some tips that I learned throughout my travels. It may seem difficult at first with so many fees, exchange rate variations and answers like “It depends", but you will see that taking money when traveling is no big deal!

How to take money when traveling

Credit card

Let's start by talking about the most feared, the credit card. It has a bad reputation among travelers due to two disadvantages:

Tax on financial operations (IOF)

It is a tax that applies to all transactions in foreign currencies. Currently its value is 6,38% of the operation, so a purchase of US$100 actually costs US$106,38. In general, this amount appears as a separate charge on the invoice, already converted into reais.

Exchange variation

In the case of credit cards, the dollar price on the day of purchase will not necessarily be the price to pay. Values ​​are defined on the day the invoice is closed, then you run the risk that the dollar will rise and the purchase will cost more than expected. In many banks, if there is an exchange rate variation between closing and payment day, there is an adjustment that is debited (or credited, when you're lucky) on the next invoice.

Other disadvantages are the possibility of losing your card, blocking it by entering the incorrect password three times, not being accepted at the establishment you are visiting or even spending too much without realizing it and exceeding your limit or incurring debt.

I had a problem in Thailand, where even though I had a limit I couldn't withdraw money using my credit card. Luckily I took one from another brand, or I would have run out of cash in a country where many places don't accept cards as a form of payment.

The advantages are the same as using for national purchases: accumulating miles, not having to carry a lot of cash, security as you need a password, not having to have the money in the bank at the time of purchase, and the additional benefit of not having to worry about exchanging reais for local currency.

If you are going to use this method, it is important to make a travel warning together with your bank. It can be done online, and serves to inform the date and destination of the trip, so that purchases are not marked as fraud and the card is not blocked while you are in another country.

You might also like: What to do a week before an international trip

Debit card (Travel Money)

The common debit card, the one used for everyday expenses, is not accepted abroad. An equivalent alternative is the so-called travel money, which works in the same way but using foreign currency.

This type of card is offered by several companies, as well as banks such as Itaú, Banco do Brasil or Bradesco. My favorite is the Confidence Cash Passport, which has the benefit of accepting six different currencies at the same time. The American Express that I got from Itaú a few years ago, for example, only accepted US dollars.

As with conventional debit, the travel money You need to have money available to operate. When making the contract, you need to put in a minimum amount, and then you can top it up. Depending on the company, it is possible to carry out this operation via bank transfer, apps or even authorize someone else to do it in person while you are away.

In the case of Confidence, I top up my Cash Passport directly through app. It may take a few business days for the money to arrive on the card, so don't leave it until the last minute.

In the case of those issued by banks, top-up is usually done via bank transfer directly from your account, and the amount is available immediately (at least that's how it works at Itaú).

A curious detail is that, even functioning as a debit card, Most places only accept this method when choosing the “credit” option. Test both methods if you have funds and the purchase is not authorized in debit mode.

A few years ago, this card was advantageous due to its low IOF, but currently the same amount of tax as a credit card is charged, 6,38%. Another big disadvantage is that this method does not accumulate miles, so if you usually use them to save money while traveling, this is not the best option.

Its great advantage over credit is that I don't need to worry about exchange rate variations, as the dollar on the day of recharge is what counts. It's a good alternative if you want the practicality of a card without the possibility of spending more than you actually have.

I also consider it ideal for teenagers who are going to travel in a group without their parents, like the famous Disney excursions. It is a way for children not to spend more than the agreed limit, as the money runs out, rs. Normally an additional card is delivered so that the customer does not have access to their money if they lose their main card.

Cash

Cash is the most advantageous in relation to the IOF, as it is only 1,1%. Furthermore, the exchange rate is that of the day of purchase, and with different houses offering different prices, it is possible to choose the cheapest one to purchase your paper money.

Why not just take “cash” on every trip, then?

In addition to the possibility of robberies, losing everything and forgery, there is also the problem of which currency to take. Let me explain: for some destinations in South America, for example, it is better to take reais and exchange them for the local currency in your destination country. This is the case of Santiago or Buenos Aires, for example, where there is demand for the real and the exchange rate is good.

In other countries in the region, it is not advantageous to carry reais due to its devaluation. It is also not advantageous to exchange for the currency of the country you are going to visit here in Brazil., as the quote is still not favorable. The ideal, then, is to take strong currencies such as dollars, euros or pounds, whose value is high everywhere.

In doubt about taking reais or dollars? Take dollars. Just be careful with old notes, as some establishments are no longer accepting them.

For countries that already use these currencies, such as the United States or Portugal, Spain, France and others that are part of the European Union, the ideal is to make the exchange here in Brazil, as the exchange rate will further disadvantage the real in exchange offices. of these places.

It is also necessary to pay attention when leaving Brazil with amounts equal to or greater than R$10.000, or equivalent in other currencies. In this case there is no taxation, but it is necessary to report it to customs and make a Electronic Declaration of Travelers' Goods (e-DBV).

What is the best way to take money when traveling?

This is one of those questions for which there is no right answer.

In my opinion, the ideal is to carry cash and a card, even if it is only to be used in emergencies.

If you don't have a credit card, put at least some of your funds into a travel money, for a little more security. I also recommend putting some notes in separate places (a little money in your purse, a little in your suitcase, a little in your sneakers, LOL) and use a money changer or a more hidden fanny pack when you go out.

Personally I change a little money before traveling, but use my credit card where possible. I do this because I use my miles program a lot and, as it is also my option on a daily basis, I have practiced not spending more than my budget.

If something happens and you are completely out of money, You can ask someone you trust to send it via Western Union. It works more or less like this: armed with their data, the person goes to a Western Union branch or affiliated stores (Banco do Brasil and Bradesco for account holders, and some exchange offices) and sends the money to another branch. When making this transaction, a code is generated, which it passes on to you. With this code in hand, you go to a WU branch and, also with the person's data, you can withdraw the money. More explanations on the official website.

As I said, there isn't much mystery to taking money on trips. It may seem daunting the first time, but aside from planning to buy paper money or carry your travel money When the exchange rate is advantageous, it’s not complicated at all!

And you, how do you usually take your money when traveling? Share your experiences and tips in the comments! 🙂 

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