How to pay for purchases on European trips — we break down the pros and cons of using cash, credit cards, and debit cards

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  • There’s more than one way to get the cash you need for your trip to Europe. You can use a credit card, get cash out of an ATM, or exchange currency before you leave the country.
  • Credit cards offer the most affordable way to make purchases abroad, but only if you have a credit card with no foreign transaction fees.
  • Beware of liability involved with using a debit card or ATM card abroad. If you report fraudulent activity between two and 60 days after it takes place, you could be on the hook for up to $500 in fraudulent charges, according to the Federal Trade Commission (FTC).

Planning your first vacation to Europe can be exciting and overwhelming. There are huge details to pore over, accommodations to book, and long, pricey flights to prepare yourself for – unless you’re using airline miles, of course. Plus, you’ll want to plan an itinerary that includes all the famous sights, ancient art and ruins, and restaurants you want to visit.

While there’s plenty you can book and pay for ahead of time, you’ll also need to have a strategy in place to pay for items once you arrive. How will you pay for that homemade truffle pasta you’ve been craving? Gelato? Trains? Will you exchange currency before you arrive, get cash out of an ATM, or pack a credit card for the trip?

It’s totally up to you to decide whether you use cash or credit in Europe, and there’s really no right or wrong choice, either. Just know that there are notable pros and cons with each payment method, and plenty to mull over as you decide.

Exchanging currency before you arrive

One way to financially prepare for your first trip to Europe is exchanging currency at your local bank before your trip. Most banks let you exchange for almost any currency in Europe, although you typically need to provide some notice (one to two weeks should be fine).

While having currency in-hand when you arrive in your destination may sound ideal, note that this is not the most affordable way to pay for your vacation.

Banks and credit unions charge a fee to exchange hard currency, although these fees can vary. A 2018 study from WalletHub showed an average fee of $4.20 USD when converting $300 USD to Euros at a bank, for example. That’s not a ton of cash to lose in the transaction, but these fees can and do add up.

Pro tip: Don’t rush into your bank the day before you leave and expect your bank to have hundreds of dollars in Euros or Norwegian krones on hand. Chances are, they won’t have what you need.

Pros of exchanging currency ahead of time:

  • Having local currency in-hand when you arrive in your destination provides a sense of security
  • You won’t be stuck without any cash if your ATM card isn’t working

Cons of exchanging currency ahead of time:

  • It’s easy to get stuck with extra currency if you don’t spend it all
  • It can be difficult to get the right amount of money if you’re traveling to multiple European destinations that don’t use the same type of currency

Read more: 6 smart ways to bypass checked bag fees every time you fly

Using a credit card abroad

Another way to pay your way through Europe is with a credit card, and this strategy is one of the best – and most affordable – available. Using a credit card for purchases abroad means you’ll get access to the most realistic and accurate exchange rates, meaning you won’t pay more for something than you have to.

Not only that, but credit cards offer consumer protections you don’t get with other forms of payment. If you have a wad of cash that’s stolen during your trip, you’re out of luck. If someone uses your credit card fraudulently, on the other hand, your liability is limited to just $50 if reported right away, according to the Federal Trade Commission (FTC). Most credit cards even have zero-liability policies for fraudulent charges.

Credit cards are the most affordable for purchases abroad when you choose a card with no foreign transaction fees. Cards like the Chase Sapphire Preferred Card and Chase Sapphire Reserve fit the bill, but there are plenty of others to consider .

Pro tip: Beware of dynamic currency conversion – a pricey situation where an overseas vendor chooses to charge your card in your currency and not theirs. This will virtually always cost you more money, so make sure to avoid it at all costs. Whenever you buy something abroad with a credit card, tell the merchant to charge in the local currency – never assume they’ll do it automatically.

Pros of using a credit card:

  • Zero fraud liability if someone steals your credit card or your credit card numbers
  • You don’t have to deal with physical currency

Cons of using a credit card:

  • Small vendors and shops may not take credit cards, especially in small towns and villages
  • You’ll need to tell merchants to charge in the local currency to avoid dynamic currency conversion

Read more: 7 travel-rewards credit cards that’ll reimburse your Global Entry fee every 4 years

Getting cash out of an ATM

Another way to access cash in Europe involves waiting until you arrive and getting money out of an ATM. This option is typically more affordable than exchanging currency at home, but it’s more expensive than using a credit card. That’s because you will likely have to pay a fee to access money from a foreign ATM outside your network. You may also be required to pay an exchange rate of 1% to 3%, along with a transaction fee that could be in the $5 range.

You can minimize transaction fees and ATM fees charged by your bank by taking out large sums of money at once instead of several small withdrawals during your trip. You can also avoid them completely by choosing a bank that offers a broad network of ATMs in your destination, or one that waives ATM fees outside your network.

For example, many travel enthusiasts swear by Schwab Bank’s High Yield Investor Checking Account due to the fact it reimburses for international ATM fees at the end of each month. The new Chase Sapphire Checking Account from Chase also offers free ATM withdrawals with no Chase fee at foreign ATMs, refunded fees from other banks, and no foreign exchange rate adjustment fees.

Pro tip: Call your bank to let them know about your travel plans before you depart. If you don’t, there’s a good chance your card will be flagged for fraud when you try to use it the first time.

Pros of getting cash out of an ATM:

  • Can be affordable if you have an ATM card that waives foreign ATM fees
  • Only get the cash you need and you don’t have to go to the bank before your trip

Cons of getting cash out of an ATM:

  • Fees can be high with some banks and in some destinations
  • Hackers and thieves abroad can use skimming devices to steal your banking information

The bottom line

At this point, you’re probably wondering why you shouldn’t just use your debit card abroad. While you can absolutely do so and there may not be many fees or charges involved, I don’t normally suggest it due to the lack of consumer protections you get when you use debit.

Where you are limited to $50 in liability when someone uses your credit card for fraudulent purchases, your liability for fraudulent debit card purchases is only $50 if you report the fraud within two days. After that, your liability goes up to $500 if you report the fraud between two and 60 business days. After that, your liability is limited to “all the money taken from your ATM/debit card account, and possibly more,” notes the FTC. Keep in mind, however, this same law also applies to your ATM card and your ATM number.

As you can see, there are pros and cons with any way you pay. Educate yourself on the basics and make sure you have a plan before you hop on a plane. Europe is an amazing destination to visit, but you’ll need money to see and do everything on your list.

Click here to learn more about the Chase Sapphire Reserve from Insider Picks’ partner: The Points Guy.

Click here to learn more about the Chase Sapphire Preferred from Insider Picks’ partner: The Points Guy.

Click here to learn more about the Chase Sapphire Checking Account from Insider Picks’ partner: The Points Guy.