How much cash do you still need to take abroad?

A shopkeeper is holding out a card reader and another person is tapping their card on the card reader

Shutterstock / ViDI Studio

Getting ready for a trip abroad never used to be complete without a visit to the local bureau de change for a wedge of foreign notes or traveller’s cheques.

Some might remember the days when the amount of cash you took abroad was limited and noted in a traveller’s passport – but 50 years on, using a card has become the dominant way to pay in daily life.

With other countries dramatically reducing the amount of cash they handle, do we still need it at all when abroad?

"It's a bit of a minefield for travellers at the moment," Erin Yurday, CEO and Co-Founder of personal finance research website NimbleFins, says.

"There are some places that largely only accept card, and others that don't at all, which can cause added stress for holidaymakers, especially if they're not as comfortable with new technology.

"There's always been hesitation to use cards abroad due to poor exchange rates and added fees, but there are an increasing number of options now that allow you to spend overseas without being charged."

Cash vs card abroad – which do I need?

Many countries around the world are moving heavily towards a ‘digital first’ method of payment.

While the UK is certainly part of this charge - only 14% of all payments in 2022 were made using physical money - other parts of the world are even further ahead.

In fact, most banks in Sweden no longer even handle cash, and places like Canada, Australia and Singapore will have you reaching for your card far more than the cash in your wallet.

But despite those changes, cash is still king in many countries across Europe and beyond.

Clare West, Independent Finance Expert at Investing Insiders, says: “Bulgaria, Romania and Egypt continue to rely heavily on cash, and some parts of Greece and Portugal will also want notes and coins, so it’s worth checking in advance with your travel operator or local guides what they advise about suitable payment methods.”

Parts of Latin America, Southeast Asia and Africa also use more cash than plastic, according to Lee Dobson, co-founder of travel review website Travel City, “especially in rural areas and small establishments".

And despite being one of the most technologically-advanced nations in the world, cash is still often the only option of payment in parts of Japan, where many ATMs still don’t accept international credit and debit cards and people feel safe carrying large amounts of Yen.

In fact, in 2023 only 39% of consumer transactions were made digitally.

What are your cashless options?

Although you can use your normal debit or credit card abroad, these often come with ‘non-sterling transaction fees’ every time you use them – usually around 3% and perhaps an extra cost of a few pounds on top every time you use them.

In the late 2000s, Natwest offered one of the early mainstream travel cards, allowing commission-free card use abroad – this was ended in 2010, but since then several other cards have sprung up to take its place.

Prepaid travel cards are a modern alternative to travellers’ cheques and involve topping up a card with money in advance, which can be used for payments and to withdraw cash from foreign ATMs, usually without transaction fees (although check terms and conditions before you go, as there may be caveats).

These cards are more secure than cash as you can freeze them if stolen, and you lock in the exchange rate when you top up, so you’re not reliant on local charges.

Olein Webster, Owner of travel agent Diamond Travel, says: “If using a prepaid card, keep an eye on the exchange rate for a few months before your trip. When it’s favourable, load your card with the currency.

“Any money left on your card after your holiday can be converted to other currencies ready for your next trip – and again watch the exchange rates.”

Many cards allow you to load up multiple currencies, which is useful if heading on a cruise or multi-destination tour – but make sure you check your destination is covered before buying.

There may be some fees for use though, and these vary between the card providers, so it’s important to do your research and be clued up on any costs you may incur when using them overseas.

Yurday adds: “Be sure to check the application fees, annual or monthly account fees, charges to load more money, fees to withdraw cash and make purchases, etc. because these can add up if you're not careful.

“And if the card machine asks, pay in the local currency rather than pounds to get the best rate.”

You also have the option of a debit or credit card offering fee-free transactions abroad.

West adds: “Some of the newer, challenger banks are set up to make spending abroad cheaper and easier.

“The [cards they provide] offer some of the cheapest ways to spend abroad. You’re likely to find great exchange rates and offers such as zero foreign transaction fees and free cash withdrawals from foreign ATMs."

Credit card use also has the protection of Section 75 of the Consumer Credit Act, which means if you have any issues with a service or goods bought (such as being damaged or not properly provided) you’ll be protected, as long as they cost between £100 and £30,000.

A table with lots of exciting items indicating someone is on holiday - a camera, sunglasses, a sunhat, a map and foreign currency in a jar that says 'Adventure' — Shutterstock / Yulia von Eisenstein

Keeping safe

Webster says that cards are often safer than cash, but you still need to be careful. “If you use a currency card, don't use one linked to your bank account so if it gets stolen, there’s less risk of your bank account being cleared.”

While you've probably heard this advice before, it’s still as relevant as it was years ago, despite the improvements in fraud prevention.

Similarly, the age-old guidance of telling your bank if you’re heading to another country can still be a useful move, as this can reduce the chances of your card being blocked for use.

It will also make the situation clearer if you need to contact them to report fraud.

While some banks will say you don’t need to tell them you’re travelling, as they’ll automatically detect when you’re abroad, others will still allow you to do so.

If you have a mobile banking app, opening this when you’ve arrived (and on a secure connection) can help prove your location and reduce the chances of your card being blocked when you start making purchases in a different country.

If you’re worried about carrying cash with you, nothing has really changed with that advice either: don’t leave anything in a pocket that a hand can be easily slipped into, share cash around with others in your party, if you can, and a money belt under the clothes allows for greater security too.

Many modern belts have improved construction to guard against being cut open and have pockets for cards and passports.

While the chances of a contactless card being used or copied by thieves is very low, a belt with an RFID-blocking pocket can provide greater peace of mind.

What should I do on my holiday this year?

While it’s easier (and cheaper) than ever to use a card abroad, holidaymakers will generally need a mix of both card and cash when travelling, but the ratio depends on where you’re going.

You’ll be able to use bank cards for hotels, large shops and established restaurants in most countries, but for the less-developed nations you may want a little extra currency before you go.

Dobson says: “I would use a credit or debit card with no foreign transaction fees and favourable exchange rates for most transactions. Then carry a reasonable amount of local currency for small purchases, tips, and emergencies.

“The amount depends on your destination and length of stay but generally £100-£200 in local currency is a good starting point."

If you’re travelling somewhere with a lot of street markets, it’s prudent to assume some won’t take cards – especially if it’s somewhere with frequent power outages or spottier internet connections, meaning the readers may often fail to work.

Key takeaways

Some countries are heavily reducing the amount of cash they use, with some shops refusing to take it.
However, in many parts of the world cash is still dominant – so you’ll likely need to have some to hand.
Some prepaid, credit or debit cards allow you to pay in the local currency and without transaction fees.
Some also don’t charge to use ATMs abroad – but always withdraw in the local currency and keep a keen eye on exchange rates.
Pickpocketing is still a risk, so follow the age-old advice of keeping your money out of sight, never taking large amounts unnecessarily, and investing in a well-made money belt.