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Lima, Peru. Photographer: Nuñez Berrospi.
A guide to diversifying your finance options abroad
By Jess Zacker
Briefly …
With a clear understanding of the pros and cons, Jess compares popular solo traveller finance options to help you streamline your choices that will not only complement your particular travel needs and expectations, but also quite possibly save you money.
Travelling opens the door to unforgettable adventures, but managing your finances abroad can feel overwhelming if you’re unsure of the best tools to use. From hidden fees to fluctuating exchange rates, the wrong choice could mean spending more than necessary, and no one wants that in this day and age!
There is no ‘one-size-fits-all’ answer, because each travel finance option has its own strengths and weaknesses. Whether you’re a frequent traveller or an occasional explorer, finding the right mix of tools can make a difference.
Sangenjaya, Tokyo. Photographer: Alex Knight.
Wise Money (and similar multi-currency accounts)
Wise Money, along with other similar multi-currency accounts, offers a revolutionary way to manage your travel finances. It allows you to hold multiple currencies at once, which is especially useful if your journey takes you through Asia, the UK and then Europe for example. You get transparent exchange rates with the mid-market rate and no hidden markups, unlike traditional banks. You can spend directly in more than 50 currencies and avoid unnecessary conversion fees, and transfers are quick and seamless, even across currencies, with only a minimal cost. Fees remain low overall, with just a small upfront charge for transfers and ATM withdrawals. Everything is managed through the app, where you can manage your account, freeze your card, and generate virtual cards for added security and control.
There are a couple of challenges to keep in mind. Free ATM withdrawals are capped, with small fees applying once you go beyond the limit. And because all features run through the app, you’ll need stable internet access to use it fully.
Wise Money is best suited to frequent international travellers who want a cost-effective, transparent and flexible financial tool.
Barcelona, Spain. Photographer: Cyrus Gomez.
Credit cards
Most credit cards from major banks are built for global use, and they come with a range of added perks for travellers. They’re widely accepted around the world, making them ideal for cashless payments, and many offer rewards programs that let you earn points to redeem for flights or hotels. Some cards also include extra benefits such as free travel insurance, lounge access or emergency assistance, which can make life on the road a little easier.
There are, however, a few challenges to keep in mind. Foreign transaction fees are common and can add 2–3% to every purchase, and the exchange rate margins often hide extra costs within less favourable rates. Plus, the easy access to credit can sometimes lead to unplanned expenses if you’re not keeping an eye on your spending.
Credit cards are best suited to travellers looking for luxury perks or rewards that complement their spending.
Kyoto, Japan. Photographer: Sorasak.
Prepaid travel cards
Prepaid travel cards let you load your chosen currency before you leave, giving you a fixed-budget way to manage your money on the road. They allow strong budget control because you preload the funds, helping you avoid overspending, and you can lock in exchange rates in advance to protect yourself against currency fluctuations. They also offer a layer of safety, as lost or stolen cards can often be replaced with your balance still intact.
The challenges? Various fees, including fees for reloading your card, inactivity, and using ATMs, can add up over time and reduce the card’s value. Prepaid cards also face limited acceptance, and they may not work for things like deposits, such as car rentals.
Prepaid travel cards are best suited to travellers on a fixed budget who want to minimise the risk of overspending.
Natural History Museum, London, UK. Photographer: Claudio Testa.
Traditional bank accounts
Using your existing traditional bank account is the most straightforward option, but it isn’t always the most cost-effective when travelling. It’s convenient and familiar, with no need to set up new accounts or tools, and it offers robust security and fraud protection. It also provides reliable access in emergencies (if your card is lost, stolen, or retained by an ATM), you can visit a branch of the partnered bank for assistance. Many partnered banks will let you withdraw funds directly from your account by verifying your identity, so you’re not left stranded without access to your money.
The challenges to consider are that fees can be high, with charges for withdrawals, currency conversions, and transactions abroad. Fraud alerts can also interrupt your plans, as banks may block cards when they detect unexpected foreign activity unless you’ve informed them beforehand.
Traditional bank accounts are best suited to occasional travellers or those visiting well-networked destinations.
Lucca, Italy. Photographer: Jelle van Leest.
Local currency
Local currency remains an essential option for travellers, especially for small purchases like a drink or snack while you’re out exploring. Cash has universal acceptance and works everywhere, from street markets to remote rural areas, and there are no transaction fees, which makes it great for small purchases like snacks or transport. There are, however, a couple of challenges. Carrying large sums can be unsafe, and exchange rates vary widely, with airport exchange services often offering poor rates. It’s better to use trusted providers when converting your money.
Local currency is best for travellers heading to rural areas or regions with limited card use, where cash is the primary method of payment. It’s also ideal for anyone wanting to pay for transport, tip service staff or make small purchases without relying on cards.
Berlin, Germany. Photographer: Marie Bellando Mitjans.
PayPal and other digital wallets
PayPal, Apple Pay, Google Pay and other digital wallets are modern tools designed for online payments and transfers. They’re easy to use for quick payments, whether it be at a restaurant or booking a last-minute day tour. These platforms also offer secure transactions that protect your card details from vendors, and the instant transfer feature makes them ideal for splitting costs with fellow travellers.
There are a few challenges, though. They aren’t always accepted everywhere, and in some countries their availability for in-person payments is limited. Fees also apply, and conversion or transfer charges can be higher than what you’d pay with Wise Money.
Digital wallets are best suited to tech-savvy travellers visiting destinations with modern payment systems.
When you are making informed decisions about which travel money finance options work best for you, it’s important to remember the golden rule – don’t put all your eggs in one basket. Each method has its strengths and challenges, so the key is finding the right combination to suit your travel style. To stay prepared, it’s best to rely on at least three options. For example, Wise Money for everyday transactions, currency conversions, and low-cost transfers; a travel-friendly credit card for larger purchases, emergencies, or deposits; and, of course, some cash for those times when digital payments aren’t accepted. By diversifying your options, you’ll be ready for whatever your journey throws at you. Safe travels!
Jess Zacker is a passionate solo traveller and an independent travel advisor who has been in the travel and tourism industry for almost 20 years, and you can connect with Jess via her website here.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial, legal, tax, or investment advice. It has been prepared without taking into account your personal objectives, expectations, circumstances (whether travelling or not), financial situation, or needs. Before acting on any content contained in this article, you should consider whether it is appropriate for your circumstances and consult with a qualified professional. While care has been taken to ensure accuracy, The Solo Traveller Group and Firestar Studios disclaim all liability for any loss or damage arising from reliance on this information. Past performance of any financial product or strategy mentioned is not indicative of future results.