Travelling and money

As you prepare to leave Canada, don’t forget to take steps that will help you avoid financial problems that may ruin your trip. Make sure you purchase travel insurance, and most importantly make sure you always carry a backup source of funds such as a major credit card in case of emergency or an unexpected delay.

Here are some important tips to help you avoid high interest rates and international transaction fees while you are enjoying your trip abroad.

Cash

Check with the embassy or consulate in Canada of the country you are planning to visit to make sure you are allowed to import or export its currency. If you are permitted to import its currency, bring enough cash to get by for a couple of days and keep it in a money belt or in several different pockets in case your wallet is lost or stolen or your financial institution accidently freezes your cards. When you arrive at your destination, you can withdraw more cash from an ATM.

Credit cards

We recommend you use a major international credit card for the majority of your big purchases, such as your airplane tickets, hotel bills and restaurant tabs, in most countries. If you reserve your hotel and rental car on your credit card, the reservation should be guaranteed even if you arrive late. Use the credit card instead of cash wherever possible. Credit card issuers typically charge fees for international transactions and you may get the best exchange rate and fees lower than those associated with exchanging cash.

You should not use your credit card to withdraw money from an ATM, because the fees and interest charges are very high. Be aware that not all major credit cards are accepted everywhere, so you should check with your financial institution before you leave on your trip. In some destinations merchants prefer to be paid in cash rather than by credit card because they must pay a percentage of the bill to the credit card company. In some destinations it is not advisable to use a credit card due to the risk of cloning the card, particularly in restaurants.

Pre-paid cards

Some financial institutions offer pre-paid travel cards in a number of currencies for travelling abroad. The cards can be “loaded” with money from your bank account and used the same way as a credit or debit card. Pre-paid travel cards may be an alternative to carrying large amounts of cash or travellers’ cheques. However, these cards may have higher fees than credit and debit cards, so check the terms and conditions and costs before you decide to travel with one. They may also not be accepted at some hotels and car rental companies, and they may be difficult to use at foreign banks’ ATM machines. You can usually replace a pre-paid travel card as you would a lost or stolen travellers’ cheque.

Debit cards

Check with your financial institution as you plan your trip to find out whether it has international branches or partners in your destination country where you can use your debit card fee-free.  Always use bank-affiliated ATMs when you are abroad, but be aware that your debit card may not work in every ATM machine in your destination country.  Due to the potential for fraud and other criminal activity, you should use your credit cards and debit cards with caution. Use ATMs during business hours inside a bank, supermarket, or large commercial building. In rural areas of some countries you may not be able to find an ATM that is part of your financial institution’s network, so plan ahead and withdraw enough cash to manage until you are back in a city. Your debit card probably won’t be accepted at stores or restaurants abroad, so you should carry some cash to cover daily expenses. Using your debit card to withdraw money from ATMs will cost you extra in fees, but you can minimize them by withdrawing larger amounts less often.

Travellers’ cheques

Canadian travellers’ cheques are not widely accepted worldwide, but are an option if you don’t want to use credit or debit cards or carry large amounts of cash. When possible, order the cheques in the local currency and carry multiple cheques in small denominations. If you can’t order cheques in the currency of your destination country, order them in U.S. funds, which are widely accepted. Sign them as soon as you get them and keep the receipt in a separate location. If they are stolen they can be replaced anywhere in the world, usually within 24 hours.

Save everything

As you travel, save all ATM and transaction receipts in an envelope. Bring them home in your carry-on bag. Save your airline boarding pass to prove your return date. If you need to dispute a transaction, sending a copy of your receipt will speed up the resolution process.

After you return home, carefully examine your credit and debit card statements and continue to do so for several months. Identity theft and credit card fraud are not confined to Canada. If you notice any unusual charges on your statement, inform your financial institution immediately and request a copy of the receipt.