TCs Are Forever

Ever since banks introduced prepaid foreign exchange cards for overseas travelers, there have been several articles extolling their virtue. No doubt some of them have been inspired by banks that don’t do traveler’s checks and likely earn sizable income by issuing prepaid forex cards. However, most of them don’t seem to have the slightest idea of the practical difficulties faced by travelers in using such cards during their overseas trips.

It was a refreshing change to read a balanced perspective in this article that offers suggestions for overseas travelers. Based on my personal experience, let me add a few more tips:

1. Many ATMs in the USA, UK, Germany and other foreign countries have a rather small daily maximum cash withdrawal limit, so for big-ticket expenses (e.g. putting up deposit for a service apartment for a fortnight), you’d need a lot more cash than you can get from a typical ATM in a single day. With a forex card, you’d end up having to visit the ATM several days in a row before you’ve accumulated the required amount! Not all establishments in this category accept credit / debit cards, so traveler’s checks are the best option. 
2. A business associate recently received TCs entirely in USD 500 denomination from his company’s local forex dealer in India, only to find that there were very few exchange houses in any given city in the US that accepted such high value TCs. He had a tough time finding one and had to spend big bucks in taxi fare to reach it.
3. Beware of forex cards handed out by banks on late Fridays or over the weekend. With many banks, the credit is uploaded to the card only on Monday, being the next working day. This means, you could get stranded at your destination without cash over the weekend. So, TCs are the best option if you’re traveling out on Friday or over the weekend.
4. If you don’t mind the 2-3% surcharge that card transactions typically attract overseas, there’s perhaps nothing to beat the convenience and safety of a credit card. But this is applicable only in the US where credit card acceptance at stores is very high. In Europe, apart from a comparitively lower level of acceptance of credit cards, there’s another problem: magnetic stripe cards issued by banks in India, USA and the remaining non-EMV countries in the world are rejected by many establishments in Europe which has largely migrated to EMV chip-and-PIN cards several years ago.

All in all, it seems like a good idea to carry money in a mix of cash, card and traveler’s checks while traveling abroad.