What you lose in convenience you gain in security when using cash to pay for your trip, buy souvenirs, and leave tips for waiters. While credit and debit cards are useful if you get ripped off, using cash can prevent it from ever happening.

Purchasing Tickets

Pro

  • Tickets purchased in cash can protect your privacy keeping travel itineraries out of bank hands. This may seem like paranoia, but you may want to consider it if you’re traveling to a destination unpopular with your government.

Con

  • For more expensive travel you should consider the protections a credit card can offer since many of them offer trip protections.
  • For instance, Citi PremierPass Elite MasterCard comes with Trip Cancellation/Trip Interruption Insurance for free.

Buying Clothes, Food, and Gifts

Pro

  • Cash can prevent credit card fraud, especially if you’re traveling outside of the United States since most other countries haven’t outlawed the printing of full credit card numbers on receipts. Having cash in hand may also help you to bargain a good price, provided you don’t show exactly how much you have.
  • ATM machines generally have the best exchange rates of the day – and once you pull out cash you won’t be shafted if the dollar gets weaker or your local economy tanks.

Con


  • There is only so much cash you can carry and if you will be buying a bunch of things, feeding all of your friends, or want to buy a Vespa cash may not be feasible. Most ATMs also limit the amount of money you can take out at once or within 24 hours, limiting your spending (which may be a good thing). Multiple ATM trips may cause you to pay withdrawal fees over and over, which is a waste of money.
  • Having a credit card and a little bit of cash will protect you if you are mugged. The thief gets a little bit of cash and you can dispute the claims later. Walking around with a fat wallet or purse and being a tourist may make you a victim of crime. Cash lost in any way has no protections.
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Tipping

Pro

  • International tipping etiquette varies, but in most places it’s the leftover change from the biggest bill left behind. In other places the size of the tip depends on the service you got. As Kim pointed out, don’t reward bad service with a good tip (in Canada, for example). Leaving a small tip to an already grouchy server with a credit card might lead to the server just adding whatever they feel like.
  • Yes, you can dispute charges with your credit card company, but small charges may be ignored and your motivation to fight an additional $5.07 may wane with once you start faxing papers and making phone calls. Unless you’re the diligent type and keep all of your receipts, it will be hard to remember how much you left behind as well.

Con

  • Walking into a bar or restaurant without a credit card may leave you in a tight spot if the meal turns out to be more expensive than you expected. A credit card is good to keep handy in case you’re caught off guard and expected to pay for your classmates or realize that alcohol is almost 3 times as expensive in Sweden.
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Emergencies

Smart travelers know to keep an amount of emergency cash with them at all times. The minimum amount being enough to pay for a cab (or bus) ride back to where you’re staying. Always keep a small amount of cash in your wallet with your credit cards. The rest of your cash (and 1 emergency credit card) should be hidden on your person. A sock, under your feet, or a bra are good places.

  • The further away from home you are, the more emergency money you should keep with you.

Cash and credit go hand in hand and you should always have both as well as an unactivated credit card. Small purchases are best made with cash and larger items with credit. Finally, keep an envelope with you as well to save your credit card receipts in case any problems arise.

[photo by: dyobmit]