Is Cash or Credit Better for European Trips?

For many tourists, a trip to Europe is one of the more memorable experiences of their life. The last thing you want to do is sour your voyage by finding yourself unable to pay for a hotel room or train fare while you’re there.

If a vacation or business trip is on the horizon, here are some things to keep in mind about using credit cards and cash in Europe. Heading over prepared can help you avoid a lot of trouble – and perhaps some missed sightseeing opportunities – while you’re traveling.

There’s a lot that you can buy with a credit card in Europe, so bring at least one. But don’t expect to get very far without a little cash, too – especially if you’re a tourist. Transportation services, such as taxis and buses, often require local currency. The same is true if you hire a guide to help you navigate the unfamiliar surroundings.

Don’t bother to load up on euros, the currency of 19 European countries, before your flight. You can simply visit an ATM once you arrive and withdraw euros – or pounds, if you’re visiting the United Kingdom. With a conversion fee between 1% and 3% – and sometimes a nominal transaction charge ­– this is one of the least expensive and most convenient ways to get cash overseas.

If you have more than one bank account, you may want to compare international ATM fees beforehand and use the one that’s more attractive.  

Many businesses – particularly those that cater to travelers – accept credit cards. Carrying plastic also cuts down on how much cash you have to carry, which eliminates some of the pain if your wallet is lost or stolen. Pickpockets are not uncommon in most European cities, so be advised.

If you’re planning to bring a credit card, there are a couple of things to remember. First, bear in mind that some cards are more widely accepted than others. MasterCard and Visa are among the most commonly used payment networks. American Express, Discover and Diners Club are less widespread, though some merchants will take them.

It’s also important to realize that Europe uses chip-and-PIN technology. This means their cards use an embedded chip that helps validate the physical presence of the customer’s card. Rather than signing a receipt, cardholders enter their four-digit PIN code to complete the transaction. American banks have rapidly rolled out cards that have the chip due to changes in fraud liability laws, but the PIN portion is still not the norm.

You may still get away with a standard American card at some major hotels, although they’ll likely ask for your PIN. If you don’t know it – after all, PINs are rarely used for U.S. credit card transactions – it’s a good idea to get the four-digit number from your bank before embarking.

If you’re worried about carrying a lot of cash, another option is to purchase traveler’s checks. The nice thing about these checks is that, as long as you record the number on each one and store it in a secure location, the issuer can usually replace them for free if they’re stolen.

However, some experts are skeptical. According to a Frommer’s travel guidebook, banks may charge a fee worth 1% to 2% of the face value to purchase the checks. And even if a merchant accepts traveler’s checks, it’s often with a poor exchange rate.

One alternative is to carry a modest amount of emergency cash with you in a location pickpockets can’t easily get to – in other words, not in backpacks or an unsealed pocket. Few retailers or hotels accept personal checks, so you may as well leave those at home.

As the saying goes, “When in Rome, do as the Romans do.” These days, that means carrying a chip-enabled credit card and a few euros, just in case. Also, pack your bank debit card for ATMs to keep yourself supplied with additional euros, as needed.

Disclosure: At the time of publication, the author did not have holdings in any of the companies mentioned in this article.