Although credit and debit cards have modern flair, cold cash is still an international traveler’s best friend.

But how do you even get foreign currency these days? How much cash should you take? And whatever happened to travelers checks? We talked with currency expert Bruce Beattie, owner of Foreign Currency Exchange in Birmingham, Mich., who keeps close watch on travel money issues worldwide.

 

Why would an international traveler need cash at all? Isn’t cash old-fashioned?

“Cash is still critical for emergencies and for smaller purchases where you can’t use a debit or credit card,” he said. “Have some foreign currency so if you arrive at an airport and can’t find an ATM, you have enough money for a taxi, train or a bottle of water at least.”

 

Can’t I just use my debit or credit card abroad? I have one with no foreign transaction fees.

U.S. credit cards still do not work everywhere in the world, or work in strange ways, he says. For instance, “Germany is still largely a cash country even though it is the biggest eurozone,” he says. “You can’t charge a cup of coffee there. They want cash for anything under $30, basically.”

Sometimes, even a no-fee credit card will register overseas as a cash advance, incurring fees. Sometimes, your credit card simply won’t work, even if it has chip and pin technology. Always take backup cards. And, of course, cash.

 

What happened to travelers checks?

They still exist, but almost no one uses them. “Counterfeiters figured out how to make them,” says Beattie. “We stopped selling them in 2007. People would tell us they couldn’t cash them anywhere.“If you still have them, deposit them into your bank account. They are still good.”

 

Where can you get foreign currency abroad?

“Currency exchange windows at airports, railway stations and hotels have the worst rates, and cruise ships, too, because you are a captive audience,” he says. Instead, use a bank or bank-owned ATM, preferably one inside of a bank for the best rates and safest transaction. “If you use an independent ATM you are at risk of skimming machines [that criminals install to commit fraud]. Also, privately owned ATMs can charge as much as 10 percent in fees, plus the regular exchange fee.”

 

What about changing money on the street?

Not a great idea. “You might pay a bit more at a bank, but it is worth it. We had a travel agent take a group to Tanzania. They bought old Tanzania dollars on the street that turned out to be worthless,” he says. “They got taken.”

 

You sell foreign currency. Do some people carry a lot of cash, like tens of thousands?

Yes, said Beattie. “I always ask people, what is your comfort level with carrying cash? If it is not high, don’t carry too much because you will be worried about it.” If you do carry cash, split it up and keep most of it in the hotel safe. Be sure you know rules on how much cash is allowed to be taken in and out of the countries you plan to visit.

 

Why is the exchange rate I get never as good as what I see on currency information sites such as xe.com?

Those are rates for large currency market transactions and the midpoint between buy/sell rates. Still, published rates give you a rough idea of the true retail exchange rate.

 

What if you find yourself without any cash or credit cards?

“Someone can wire you money via MoneyGram or Western Union. In our experience, transit time, depending on where you are, is 10 minutes to a week. Sometimes someone takes a cut of it along the way,” Beattie said.

 

What about a prepaid credit card where you can add value to it?

Be careful. “Some prepaid cards you buy are actually like gift cards and can only be used in the United States,” he said. However, a card such as the prepaid Visa Travel Money card or Travelex Cash Passport prepaid MasterCard is reloadable and usable in other countries, making it good for students studying abroad.

 

If you buy too much foreign currency, can you change it back into U.S. dollars when you get home?

“Yes. But you will get less for it than you paid for it.”

 

What about old foreign currency?

“It depends on the currency itself. Some have a window in which you can turn it in. For instance, Germany uses the euro. But the old German mark has not closed the window for exchange; it still has value. But the Italian lira and French franc, those countries stopped honoring that currency a few years ago.”

 

So if I have old French francs are they worthless?

“Pretty much, except to the secondary market of collectors.”

 

Which countries have money that never expires?

The U.S. and just a couple others. The euro does not expire (at least yet). “Most currency expires. Brazil, for example, has had three or four currency changes since the ’70s,” he said.

 

Some places in the world accept tips in U.S. dollars but they ask for crisp new bills. Why?

So the bills can more easily be verified as real and be accepted for exchange at their banks, Beattie said.

 

MONEY TIPS

• You can order foreign currency from your bank or AAA Travel. “Your best bet is to talk to your banker, and not the day before you are supposed to leave,” said Christine Holevas, a spokeswoman for Chase Bank.

• To find out current foreign exchange rates, go to xe.com.

• The bible of foreign currency is the MRI Bankers Guide to Foreign Currency (mriguide.com). Take a look at the “updates” section to see the latest on the wild world of currency.