Paper (cash) or Plastic (credit) ???
Advantages of Plastic
Remember in the olden days of maybe 15 years ago, when before your overseas trip, you went to the bank to buy your Traveler's Checks??? And you had to sign each and every one in front of the teller / cashier. It was drilled into our brains that cash was dangerous because you could lose it or have it stolen. But your Traveler's Checks would be reimbursed to you if you lost them or had them taken.
Fast forward a few years and the nearly universal acceptance of Visa and MasterCard. Plus, you don't have to try to compute the conversion rate into the foreign currency - - the credit card company does that for you. (To find out what the exchange rate is for any currency worldwide, go to: http://www.xe.com )
BEFORE YOU GO - call your credit card company to tell them what foreign countries you'll be traveling to (including the stops where you'll be changing planes). Give them your beginning and ending dates. If you don't pre-notify them, they will probably block the charge and ruin your vacation.
Sometimes A Debit Card is Better
Along with the growth of the credit card industry, many of us also have a debit card. Using the debit card is comparable to writing a check, except much easier and no writing involved. But it also means the money is deducted from your bank account immediately.
There are benefits to using your bank credit card when you're traveling overseas. When you find you need some local currency (for small purchases or for the few small businesses that don't accept plastic), it's usually to your advantage to use your debit card in the ATM in the foreign countries. You should verify this with your own banks and credit card companies, but I found that the debit card fees (of 2-3%) were considerably lower than the credit cards fees. One credit card company told me there was a $15 fee PLUS a 7% fee.
That being said, don't try to get $300 cash from an ATM with your debit card if your bank account only has a $275 balance.
So Why Do I Need Cash???
Well, as a spoiled American, this took me a little getting used to. But in many countries, you'll need coins for the toilets. Even in the restaurant where you've just paid for a wonderful meal, you also must pay for the use of the toilet. If there's not a coin lock on the door, then there's probably a restroom attendant who you would tip.
The quickest and easiest way to get some coins is, when you get off your plane or train, buy a pack of gum or candy, and pay with paper currency.
Sometimes I'd run into a language / money conversion problem. For example, the coins might look alike. Is this coin a 5 zloty or 5 groszy??? In those cases, I would just hold out my handful of coins and the merchant would take what they needed.
Currency of PolandClick thumbnail to view full-size
Save those receipts!
To be a smart traveler, you need to save all your receipts. Whether you keep them in a plastic bag, or an envelope from your hotel's stationery - - - keep all your credit / debit card receipts. If there's any dispute with an amount, your credit card company will want to see your paperwork. Sometimes I save my cash receipts too, just to see how much I spent on meals or whatever.
Don't be surprised if not all of your charges show up on your next credit card statement - - sometimes it takes a couple months for everything to come through.