Is it better to withdraw cash abroad with a credit or debit card?

Cash Abroad: Credit Card First, Debit Card Backup – Your Travel Money Strategy

Traveling internationally often brings the question of how best to access local currency. While exchanging cash beforehand might seem simple, it often comes with poor exchange rates and the risk of carrying large sums. So, when it comes to getting cash abroad, is it better to use a credit card or a debit card? The answer, increasingly, is both – but with a strategic approach.

Prioritize your credit card for the majority of your cash withdrawals. Credit cards offer several key advantages when traveling internationally:

• Wider Acceptance: Credit cards, particularly Visa and Mastercard, are accepted at ATMs worldwide, often in places where debit cards might not be recognized. This gives you greater flexibility and access to funds, especially in less-developed regions.
• Superior Fraud Protection: Credit cards offer robust fraud protection. If your card is lost or stolen, or if fraudulent transactions occur, your liability is generally limited. This peace of mind is invaluable when far from home.
• Travel Insurance and Perks: Many travel credit cards offer complimentary travel insurance, covering lost luggage, medical emergencies, and even trip cancellations. Some also provide perks like airport lounge access or foreign transaction fee waivers, adding further value.
• Building Credit History: Using your credit card responsibly while traveling, and paying off the balance promptly, can positively impact your credit score.

However, relying solely on credit cards for cash withdrawals isn’t ideal. This is where your debit card becomes a valuable backup:

• Direct Access to Your Funds: Debit cards deduct funds directly from your checking account, avoiding the interest charges that can accrue with credit card cash advances. This can be helpful for budgeting and managing spending while abroad.
• Alternative in Case of Issues: Having a debit card provides a safety net if you encounter issues with your credit card, such as it being lost, stolen, or declined.
• Local ATM Networks: In some countries, local ATM networks might be more compatible with debit cards, offering better exchange rates or lower fees compared to using a credit card.

The winning strategy is a dual approach: Use your credit card as your primary method for cash withdrawals, leveraging its global acceptance and fraud protection. Supplement this with a debit card as a reliable backup for accessing your funds directly or in situations where credit cards are less prevalent.

Before you travel, remember to:

• Notify your bank and credit card company of your travel dates to avoid any security flags on your accounts.
• Check for foreign transaction fees associated with both your credit and debit cards and consider options with lower or no fees.
• Research ATM locations and fees at your destination to minimize withdrawal costs.

By adopting this dual card strategy and taking the necessary precautions, you can ensure access to your money safely and conveniently, maximizing your flexibility and enjoyment while traveling abroad.