Going card-only abroad? Think again – here’s five reasons why cash still matters
It’s easy to assume that cash is becoming a relic of the past, especially with the rise of contactless cards and digital wallets. However, when you’re travelling abroad, relying solely on digital payments could leave you stranded, as cash still plays a vital role in many countries daily. Depending on your destination and spending habits, having some local currency in your pocket can still be a smart move to help with potential issues that can arise with travel cards and contactless payments.
Recent research found that Brits use cash more abroad than when they are at home, and that’s with good reason. Money expert, Hannah Mayfield, has worked with specialist travel insurance comparison site, PayingTooMuch, to reveal the reasons why relying on digital contactless payments for your next holiday could backfire.
1. Cash-based economies
We’re used to the fact that most of the UK accept card and contactless payments as the main method of transaction, but there are many other countries and regions that are cash-only.
Notably, Japan welcomed a record number of UK tourists last year, yet Japanese society continues to rely heavily on cash transactions. Rural areas and independent shops have been especially slow to follow the transition taking place in Japan’s cities and large towns, so your cashless wallet may only go so far.
Many other countries also rely on cash because of the extent of their rural population, so it's even more important to be prepared and take cash if you’re planning to go somewhere more remote.
2. Tipping
Tipping in cash is generally the most effective and appreciated way to show gratitude to individuals for good service abroad. Card tips can be delayed, taxed or absorbed by employers, and they don’t work as well for those who often rely on tips to pay for the day-to-day. Not to mention, service industry workers such as hotel porters and tour guides are unlikely to have a card machine to hand!
3. Emergencies
Whether it’s a lost wallet, lost rucksack, or you find that your designated payment card isn’t valid in the country you’re visiting, having hard cash in case of an emergency can be a lifesaver. Enough back-up currency for a taxi and a night of accommodation can be a massive help in these circumstances.
4. Cybersecurity
While you aren’t necessarily any more susceptible to card fraud abroad, sorting out a fraud problem when you’re away from home can be much more problematic. If you get caught out by card-skimming devices, tampered ATMs or thieves using NFC readers near your phone, your card details can be stolen and force you to cancel your cards. If that happens it's best to have some back-up cash.
5. Budgeting
Having your holiday budget in a purse or wallet can make you think twice about spending unnecessarily, and by withdrawing a set amount of cash before your holiday, you can set yourself a hard budget. Common mistakes, such as tapping without looking and spending as you go, can result in a holiday going way over budget because of contactless payments.
Protecting your spending money with travel insurance
Before jetting off, it’s a good idea to check what your travel insurance policy covers, in terms of theft, fraud and extra costs when abroad.
Hannah Mayfield says:
“Whether you decide to go abroad relying solely on your cash, card, or if you choose to take both, you can make sure you’re covered against most money-related issues by comparing travel insurance packages. With cash, provided you have proof of withdrawal or currency exchange receipts and can show you took reasonable care of your money, depending on your cover, you may be able to log a successful claim.
As for card, if you flag the unusual payments directly with your bank and report to authorities as soon as you notice your card has been stolen, you can log a claim to get your money back, subject to the policy cover limits. Whilst your bank handles fraud, having travel insurance is a backup that may cover your additional losses and associated costs.”