You’re travelling overseas. You know that you don’t want to keep a lot of cash on you. You know you can rely on your credit cards or you can purchase travellers’ cheques. Which should you go with? Which is the better deal?

There’s no single correct answer in the debate between credit cards and travellers’ cheques. There are a lot of factors you’ll have to consider such as:

• The exchange rate charged by your credit card company, or by the provider of the travellers’ cheques
• Any service fees or commissions charged when purchasing travellers’ cheques
• Service fees (or transactions fees) charged for using your credit card outside of the country (in addition to exchange rates) — can be a percentage of the purchase / sale or a set fee per transaction
• Credit card interest rates (especially if you’re using them for a cash advance at the ATM, which may not be covered by your interest free days)
• Fees when you cash in travellers’ cheques at your destination

Reasons to Bring Your Credit Cards

Travellers’ cheques are still widely available, but it’s also becoming more common to use credit cards while travelling, and for good reason. For example, credit cards are often accepted in more places. There’s also a certain amount of protection through the credit card companies, where you wouldn’t be held responsible for the charges if your card is lost or stolen while on your trip (with certain limitations).

Credit cards (as well as debit cards) also make it easier to access cash while travelling, because they can be used at ATMs. One issue with travellers’ cheques is that you have to choose a set amount of money to convert up front when you purchase them. With your credit cards, you can take out cash or charge any amount as you need it within your limit.

Some credit cards, like the American Express Blue Sky card, even offer free travel insurance to cardholders, or you may be able to earn rewards like frequent flyer points.

Reasons to Bring Travellers’ Cheques

Even though there are a lot of good reasons to use credit cards while travelling, don’t rule out travellers’ cheques completely. Read the find print of your credit card terms, and you may actually find that some travellers’ cheque providers offer you a better deal. Travellers’ cheques are also a good option for people who live predominantly cash-based lifestyles, as they can be safer than carrying cash (at least a portion of their value may be covered by your travel insurance policy for example). You may also be able to replace lost or stolen travellers’ cheques at your destination more quickly than waiting for a new credit card to be sent to you. Find out if your bank can offer you a good deal.

In the end, it’s not a bad idea to carry both credit cards and travellers’ cheques with you on your next holiday or business trip. That way you can take advantage of the convenience of credit cards and have your cheques protected by your insurance policy. Better yet, keep them in different places, so there’s no chance of losing all of your funds on-hand at once. Just make sure you’re well aware of any and all fees with either your cards or travellers’ cheques before you use them.