Handling your money while travelling abroad

Relatively speaking, it has never been easier to travel. But recent events in Greece are making even seasoned globetrotters rethink their established "money abroad" habits.

For decades, best money practices for the savvy traveller have emphasized the use of special credit cards, debit cards and ATMs, as well as conversion fee-limiting bank accounts. But, if the current spate of financial clamp down policies in Greece are anything to go by, these tried-and-true methods could prove much less effective in the years to come.

In an effort to keep their banks from running out of money, Greek ATMs and banks are limiting withdrawals to 60 euros (with a weekly limit of 120 euros).

Officially, visitors to Greece are not subject to these transaction limits. Unofficially, there's a good chance that the ATMs will have run out of money by the time you get to use one. You'll also likely have to wait in line for a very long time to find that out. And if the ATM doesn't have a snaking line tailing off from it, that's probably a sign that there's nothing left to withdraw.

Visitors to Greece will also discover it's harder to find establishments that take credit cards. The country's fiscal uncertainty, made especially poignant in Sunday's referendum, means fewer businesses will be inclined to trust financial transactions that don't resolve in cold hard cash.

Now, of course, we all hope that Greece's problems will soon be remedied and that these banking policies will help accelerate the country's recovery. It's also important to remember that, while travelling there may now be just a little more complicated, Greece is still a fantastic place to escape to.

What the situation in Greece does tell us though is that, as travellers, we need to devise a new set of best practices for managing our access to money abroad.

5 FUTURE-FRIENDLY TIPS TO KEEP YOU WELL-FUNDED ABROAD

1. Bring lots of cash. But not too much.

It used to be that the best advice was to carry as little cash as possible (just enough to get through the day and a little emergency stash). But the situation in Greece (and this can also translate to many destinations in Latin America, Africa, Asia and Eastern Europe) dictates that wise travellers must get used to carrying a lot more money than they are used to.

If you're headed for a country where access to credit and the local currency through ATMs may be difficult, certain precautions should be taken in advance.

The first thing is to determine the availability of the needed currency outside of the country. Greece currently uses the Euro, which is relatively easy to find. If you are looking for the Ghanaian Cedi, you'll have a harder time of it.

Purchasing foreign currency at home is never a great option because the conversion rates charged by banks and exchange bureaus are just too high. But, if ATMs at your destination aren't a good option, what are you supposed to do? Sadly, the safe choice is to convert at least $100 to $200 at home, and just accept that you are going to pay a little more for the privilege.

Planning a strategic connecting flight or layover can sometimes work as a way to save while building your stash of travel cash. Taking just a night in Paris or Frankfurt could secure you another 300-700 Euros (depending on your bank's daily ATM withdrawal limits).

The layover strategy doesn't translate as directly to a country like Ghana, which has a unique currency. But planning a connecting flight through a U.S. hub and snagging some U.S. dollars from the ATMs there should prove effective. U.S. dollars are accepted for exchange more readily in Ghana and other countries.

There's some debate about whether it's better to get your foreign cash in larger or smaller denominations. If you are carrying in the currency you will be spending, denominations of 20 Euros or less will be easier to spend, and easier for locals to make change.

When you are bringing in one type of currency with the intention of exchanging it for another (as in the case of using U.S. dollars to buy Cedi in Ghana), it's best to mix it up a little. Ghanaian currency exchanges will give you better rates for the higher denomination $100 and $50 bills. But you might also find it useful to have some smaller denominations available for use when out and about (you never know when a $10 or $20 bill might get you out of an awkward situation).

In either case, ensure the bills you have look new. The crinkly and creased bills we spend so easily at home are not always well-received abroad. A crisp fresh bill tends to be received without incident, while perfectly good US bills have been refused for looking too worn.

Knowing that most of your vacation transactions will have to be done using cash, you should plan to bring enough to cover your expenses for every day of the trip. It's also advisable to bring an added cushion for unanticipated expenses. A good rule for this emergency fund is to bring an extra day's worth of funds for every five you'll be travelling.

So, if you've budgeted to spend $100/day, and your trip is 10 days long, you should plan on having $1200 worth of the local currency. If you plan on a longer stay, you'll want to adjust this amount accordingly. But make sure not to go overboard or you could wind up losing your bankroll. Most countries have strict regulations on the amount of funds that can be brought in or taken out.

Greece doesn't limit the amount of funds that can be carried but does require that amounts above 10,000 Euros (whether in cash, travellers' cheques, etc.) be declared on entry or exit. Ghana, by contrast, requires all funds being brought into the country to be declared and will seize amounts exceeding $10,000 USD.

2. Don't give up on the plastic.

While it's true that credit and debit cards might not be as reliably and widely accept as they once were, they are still an important part of the wily traveller's kit.

Smart travellers advise carrying two credit cards and two debit cards, each one connected to entirely separate accounts. Ideally, the cards should also be stashed separately about your person, rather than kept in the same wallet or bag. If you are travelling with a partner, you can split the cards up between you for added security. That way, if any one of the cards is compromised (by theft, fraud, or what-have-you), you won't be left without options.

As a final precaution, contact your banks and credit card companies to let them know that you will be travelling with your cards. This prevents them from freezing your accounts when they see purchases from outside your home country, and adds an extra level of security to your accounts. This is also a good time to request an increase in your cards' daily ATM withdrawal limits.

You may not always be able to use your cards but it's unlikely you'll regret having them with you.

3. Not all plastic is created equal

Anytime you pay for something on credit or withdraw funds from an ATM in a foreign country, you are likely going to be losing a bundle in service and currency conversion fees. You can minimize the damage by choosing the right cards to bring with you.

Both the Amazon.ca Rewards Visa Card and the Marriott Rewards Premier Visa Card offer "No Foreign Currency Conversion Fees." Meaning you will only be charged the actual conversion rate, with no additional percentage tacked on.

Canadian banks generally add a 2.5 percent foreign exchange fee on debit transactions. With foreign ATM fees as high as $5, that can add up quickly. But TD Canada Trust, BMO and RBC all offer VIP-style bank accounts for between $25-30/month that provide foreign ATM use free of charge. The base fee may seem steep but depending on how much you rely on foreign ATMs, it may be worth it to you. TD offers the best option by eliminating the monthly account fee if you keep the balance above $5000, and by providing unlimited free ATM use.

Of course, none of these options are nearly as good as those available outside of Canada, such as the Charles Schwab High Yield Investor Checking Account. This US-based account charges no foreign currency conversion fee and actually refunds any and all ATM fees incurred at the end of every month.

4. Travellers' cheques aren't just for grandparents

The credit card and the debit card have largely unseated the travellers' cheque as the preferred financial tool for globetrotters. For this reason they are no longer widely accepted. This, in turn, has made them into something of a relic.

But, for destinations where the plastic options aren't as viable, travellers' cheques may provide a useful alternative to carrying stacks and stacks of cash. You may have to work a little harder to find places that will let you pay with or exchange them, yet it may be easier than finding an ATM stocked with cash.

Banks will often want to charge you a fee of one to four percent to sell you travellers' cheques but it is possible to avoid the extra cost. Visa Travel Gold members usually don't get charged for travellers' cheques and RBC has been known to waive the fees for account holders.

The Government of Canada’s advisory for travel and money notes that travellers’ cheques should be obtained in the currency of the destination country. If this isn't possible, get them in US funds. Since you can use as many as you want in a given transaction, it's better to get many cheques in smaller denominations.

They also advise signing the cheques right away and stowing them somewhere until you want to use them, storing the receipt in a separate place. That way, if they happen to get stolen or destroyed, they can be replaced with relative ease within 24 hours.

5. Frustrate — don't fight — thieves and hucksters

As a traveller, you will invariably be seen as an appealing target to all sorts of rapscallions — from pickpockets to con artists, hagglers to hucksters.

This is unavoidable.

That being the case, the best tactic is to confound those who would take advantage of you. If you can't stop them from looking at you as prey, simply make it too frustrating for them to get anything from you.

According to the Rough Guide and Fodor’s, the first step in this is to take all of the valuables you are carrying — all the money, the credit and debit cards, your passport and other IDs, photocopies of you passport and IDs, a flash drive with scans of your passport and IDs, and any travellers' cheques — and conceal them about your person in various unpredictable spots.

Money belts are a popular way of hiding your valuables but they are also a well-known traveller's trick. If you use one, it is not always the best place to store your most important items. Kevin Coffey, the founder of Corporate Travel Safety and a popular TV pundit on the subject, points out that an ambitious thief may try to get at one of these. However, if you've stowed your important documents or a stash of cash in a zippered pocket hidden inside your shirt or in a special calf-mounted pouch, it’s less likely they're going to know where to look.

Clothing with integrated hidden pockets may offer a more effective and comfortable option for keeping thieves away from your valuables. Several companies sell this sort of apparel. Scottevest , Travel Smith and Clothing Arts are particularly focused on travel clothing (Scottevest even makes boxer underwear with room for your smartphone and passport).

If you can help it, don't pull your wallet out in public or show anyone how much money you really have. Travelinsurancereview.com and many others, advise keeping small amounts of low-denomination money in various easily accessible pockets (buttoned or zippered ones preferred) and to keep track of how much is in each one.

Then, if you are haggling with a vendor over a price, you can pull out one of these bundles and use it as proof that you only have that much to spend. If that doesn't convince them, try walking away.

Thieves stalking you from nearby may also notice this and decide you aren't worth the effort for so little money. And even if they persist, there is a chance they will only go after the small portion of money you have shown. Better to lose a small sum to a pickpocket than lose something irreplaceable.

It’s also probably wiser to save any redistribution of funds or documents for when you are in the safety and privacy of your hotel room or other accommodation. When you are out and about, avoid reaching for any of your carefully hidden funds, using only what you have stowed purposefully in your allocated "ready to spend" pockets.

If you are going to keep anything of value in a backpack, make sure that it is stowed in an internal zippered pocket or tethered solidly to the bag. Thieves are very adept at pulling valuables from backpacks.

One of the most insidious money grabs perpetrated on travellers isn't a criminal one. In fact, if you didn't know better you might even think you were being done a service. The Extra Pack of Peanuts travel podcast points out that when using a credit card, you may be asked if you would prefer to pay in your home currency. On the surface this seems like a good thing, meaning you'll avoid the credit card's currency conversion fee. What you most likely won't be told is that there will still be a currency conversion done on whatever you owe, only it will be done by the establishment and you will be charged a fee that is entirely at the vendor's discretion. When offered this option, kindly decline, and ask to be charged in the local currency.

When a fast-talking vendor is pressuring you to make a deal, do not be afraid to take your time and quietly consider his or her offer. Make them wait until you have fully considered the cost and the value of the exchange. Only once you're confident that you haven't miscalculated how much you'll be spending, should you agree to a deal.

If you are going to be in a country for any length of time, try to think about the costs of things in the local currency. It may be a little difficult at first but you will find it far easier to make decisions and deals if you aren't constantly doing conversions in your head.

It can seem overwhelming to have to think so defensively while travelling. But if you are well-prepared and make being observant part of your overall travel experience, many of these precautions will become second nature.

And don't forget, what we've discussed here isn't meant to put you off travel. It's simply a matter of providing you with the tools and tricks to create the absolute best travel experience possible.

Bon voyage!