How to Handle Money when Traveling in Europe

Deciding how to handle your money when you travel can be a bit daunting. You need to have easy access to buy things, but you don’t want to end up with a ton of fees or a system that’s hard to use. Over time, we’ve decided on an easy way to handle money while traveling in Europe.

Debit Card

You probably already have a checking account that you use on a daily basis at home. While this is great, it might not give you easy access to cash. Most debit cards charge fees when you withdraw money at an ATM. This means you may end up paying $5 or more every time you want to get cash. That can add up very fast.

In order to get rid of fees, we opened a checking account with Charles Schwab. They refund any fees that an ATM may charge you when you withdraw cash. This can give you easy access to cash.

It’s very simple to open a checking account with Charles Schwab online. When you do, you also open a brokerage account. However, you don’t have to put any money into this (we never did). Opening the account also requires a hard credit pull. While this probably isn’t a big deal, it is something to be aware of.

The Charles Schwab account is easy to use and saves us money. However, you don’t need to use it as your main checking account. Instead, you can just transfer money into it as needed. We do keep a little more than we will need in the Schwab account as a buffer. Keeping only a small amount in this account reduces the chance of something bad happening is our debit card would be skimmed.

The bulk of our money stays at our regular bank, in a checking or savings account. We can continue to easily pay our credit card and transfer money into the Schwab account when needed. These accounts are also located at a bank with branches close to a trusted family member. If we need a paper check deposited, this person can deposit it at the bank without actually having access to our account.

Credit Card

Having a credit card that can be used abroad is very helpful. Credit cards are generally safer and easier to use than debit cards. While traveling, you should use a card that has no foreign transaction fees. Otherwise, you may be charged around 3% on every purchase you make.

A credit card that offers rewards is also beneficial. The specific card you choose will depend on your situation. You may want one that offers miles or one that offers cashback. It’s up to you. Either way, it’s a nice little bonus.
Many travel-based cards also offer extra points when you use them at restaurants or for travel. If your card is like this, be sure to use it at these places, even when you’re at home!

Cash vs Card

Whether you predominantly use cash or credit card will depend on where you’re visiting. In general, only use your debit card to withdraw cash. If you want to use card to make purchases, use your credit card. It offers a lot more security and protection.

Many stores and restaurants in major cities take credit cards. They may be less accepted at smaller venues and when you leave the city. It’s a good idea to always keep some cash on hand. You never know when you’ll run into a place that doesn’t take a card or if your card is ever declined.

In some cities, putting a tip on a credit card isn’t possible in restaurants. You may need some smaller denominations to tip your server.

In addition to the cash you carry with you, be sure to leave some extra in your hotel room. This should be well hidden, as it is meant as a back-up. If anything were to happen, you have a little extra until you figure the situation out.

How to Get Cash

You should not exchange cash at the airport or similar exchange stores. Your bank may offer no-commission exchange if you ask well ahead of time. Personally, I have never done this.

Instead, I pull some cash out of the first ATM I find upon arrival. It’s quick and simple to get money in the new currency. Just be sure to choose the “no-exchange” option instead of the “guaranteed exchange” option. The second can actually cost you a lot more money.

Pins, Signature, Contactless Payment

Credit and debit cards work a little differently in Europe than they do in the US. Most cards in Europe are pin-priority, while US cards tend to be signature-priority. This can cause a little bit of confusion but is easily dealt with. When paying in a store, most Europeans won’t have to sign but may enter their pin number. With a US card, you may be asked to sign a paper receipt instead.

Sometimes it can be a hassle if you are purchasing something from a kiosk, such as at a train station. The kiosk may not be able to take your credit card if you don’t have a pin. An easy solution is to just use your debit card with a pin. If you have the Schwab debit card we mentioned before, you won’t pay any extra fees.

Contactless payment is very common and very easy to use in Europe. You simply tap the chip area of your card to the payment device. Many times this even bypasses the signature requirement, making check out extremely quick.

Before You Go

Before you travel, you should have a plan for how to handle money. If you need to open a new checking or credit card account, give yourself a couple of weeks to allow the cards to arrive.

You should also notify your banks that you will be traveling. You don’t want them to lock your cards because they didn’t have a notification set.

If you have a plan, handling money is very simple in Europe. Do you have any other ways to make traveling easier? Let us know in the comments below!