Cash vs. Traveler’s Check vs. Pre-Paid Credit Card vs. Credit Cards

Several of you have asked what the easiest way to travel is for your kids.  There really isn’t a right or wrong way to travel, so I thought I would just provide the pros and cons of each:

Cash:
Traveling with cash is probably the easiest way to travel.  You always know exactly what you have to exchange.

   Pros:

•  Easy to use
•  No conversion fees after exchanging
• Easy conversion at airports, most hotels and banks
• Will need to carry at least some cash (whether through cash or traveler check exchange) for the rural areas where they do not take credit cards.

   Cons:

• Can be bulky and bothersome depending on # of bills brought
• Once lost, cannot be recovered or ‘blocked’ from usage.

Traveler’s Check:
Often the safest way to travel as these cannot be exchanged or cashed without ID and signature of the user.  Your child can use their passport to exchange these at the airport or their hotel/bank.

   Pros:

• Traveler's checks and check cards provide more security than cash because they can be replaced (usually within 24 hours) if lost or stolen. 
• Has a higher rate of exchange than cash.
•  Can be exchanged at airports, hotels and banks.

   Cons:

• Takes longer to exchange due to the signing and verification at exchange locations.
  

Pre-Paid Credit Card:
 A great way to limit space needed to carry currency are pre-paid cards.  Some pros and cons:

   Pros:

• Ease of use.
• Limited space needed.
• Limits spend amount.
• Can track remaining funds online.

   Cons:

• Since we will be traveling to rural areas, pre-paid credit cards may not be taken in all locations.  
• You run the risk of “holds” being put on funds that you are attempting to use during the trip.  This could lower the amount available to you to spend. 
• You must make sure the bank you purchase these from confirms that they will work overseas in Japan.  Some are US and Europe only.

Credit Card:
Since kids can’t have a credit card, this portion of the blog is for the parents traveling.  Credit cards are usually best for larger purchases only:

   Pros:

• The biggest advantage to using credit cards while traveling overseas is that credit card purchases are exchanged at the interbank exchange rate, usually the best rate you can get for currency exchange. While most credit card issuers charge currency conversion fees each time you make a purchase in a foreign currency (generally 1 percent from Visa or MasterCard plus an additional 1 - 2 percent for themselves), these fees are typically lower than those you'd pay to convert your own currency at a change bureau. And there are a few cards out there (many from Capital One) that do not charge any foreign transaction fees at all, not even the ones from Visa or MasterCard. (source: IndependentTraveler.com)
  

   Cons:

• Since we will be traveling to rural areas, credit cards may not be taken in all locations.  
• You run the risk of “holds” being put on funds that you are attempting to use during the trip.  This could lower the amount available to you to spend. 
• One problem for U.S. travelers is the growing prevalence of "chip-and-PIN" credit cards in Europe, Asia and South America. Designed to reduce fraud, these cards rely on an embedded chip that transmits information to a merchant, which the consumer then verifies by entering a PIN.  These cards are not widely available in the US.
• Some cards charge additional conversion rates.

In conclusion, probably the best way to travel is to have some cash / traveler’s checks and a pre-paid card.  However, the decision is really up to each individual family.  I personally use traveler’s checks and my credit card—but I have friends that are cash only too.

Hope this helps you make your decisions.

Cyndi Jones
Dublin Taiko Secretary