Travelers are vulnerable: Here’s how to keep your money safe while traveling

Extravagant post-pandemic “revenge travel” may have slowed, but travel remains a popular activity, even if people are staying closer to home. According to a recent report from McKinsey & Company, domestic travel will account for 70 percent of all travel — that’s its pre-pandemic rate – by 2030, after international travel took the spotlight in the first few years post-pandemic.

Whether you’re sticking close to home or crossing oceans to satisfy your wanderlust, you’ll want to keep your money secure while traveling. Protect yourself from sneaky pickpockets and even credit card fraud with these tips to keep your money safe when traveling.

Key cost of traveling statistics

Stick to credit cards…

One way to stay financially safe while traveling is to use credit cards. They come with zero liability protection in case your card is stolen or compromised, as well as other consumer protections. For one, you can dispute fraudulent charges and billing issues. If you use debit cards, you will have fewer protections and could find yourself on the hook for losses.

While credit card fraud is harmful, the loss is limited when you act quickly. When a thief swipes your credit card, they’re not touching the money you’ve earned or what you use to pay bills. Stealing your cash or a debit card, however, could be more devastating as you may have to wait days for funds to be returned to your account after filing a dispute with your bank. And even after filing a police report for stolen cash, you might never get it back.

Different credit cards offer various travel perks (such as free lounge access, lost luggage compensation and travel insurance), so it can be a good idea to take two or more cards that align with your needs. It’s also smart to have more than one card handy in case you lose one. Cards issued by the Visa and Mastercard networks tend to have wider global acceptance than those issued by American Express and Discover.

Remember, though, you may still want to keep a debit card for withdrawing cash from ATMs.

…But hold some cash, just in case

Even though it’s safer to rely primarily on credit cards, it’s still a good idea to have some cash available as a backup — and not just because it’ll come in handy if your cards are stolen. Smaller restaurants and retailers might insist on cash, and you could need cash to pay for smaller transactions with street vendors. Also, if you’re somewhere off the beaten path, cash is likely to be a more readily accepted mode of payment.

You can pick up cash before traveling by exchanging your U.S. dollars for the currency of your destination, for a fee, at a bank or credit union. At your destination, you can also get local currency at an ATM or at the airport right after your arrival. If you have to use an ATM, take the time to find one in a safe location and check for signs of ATM skimming devices.

That said, when you do carry cash, keep it safe. Opt for a money belt you can wear around your stomach, or use a jacket with pockets on the inside to stash your cash in an inconspicuous manner.

Make sure your bank knows you’re traveling

Before heading out on your travels, ensure your bank knows of your travel plans — especially if you’ll be traveling abroad. That way, it will know not to decline transactions that seem suspicious.

These days, many banks no longer ask travelers to directly inform them. Instead, banks know enough about your transaction history and activities to make reasonably accurate judgements about whether you’re traveling. This is especially true if you booked your travel on the same card you decide to use while on your trip.

Still, it doesn’t hurt to check with your bank before you embark. Banks often utilize fraud prevention measures that could be triggered if they see activity on your card account that isn’t in line with your typical spending patterns. Your issuer could then suspend your account while contacting you to verify the charge, potentially putting you in a tough position while traveling.

Since you don’t want to have a card transaction declined unexpectedly and be left without any means of paying for your purchase, keep your bank informed about your travel plans. Then, when it sees any charges you make while miles away from your homebase, there shouldn’t be an issue.

Set up account alerts

Take the time to sign up for credit card account alerts. When you set up purchase alerts, you’ll get text, email or push notifications whenever your card is used. Then, if your card is somehow compromised and someone uses it for an unauthorized transaction, you’ll know about it in time to take action.

If you get a notification about a transaction you don’t recognize, immediately notify your issuer so that it can look into the matter and freeze the card if necessary.

Freezing your credit may also be a good idea, so that no one can fraudulently open credit card accounts in your name while you’re traveling. If needed, all three credit bureaus — Experian, Equifax and TransUnion — allow you to briefly thaw your credit freezes in order to apply for credit. Once the thaw period expires, your credit will be re-frozen, protecting you while you’re away.

Be on the lookout for scammers

Tourists on vacation can be an easy target for scammers, which is why it’s important to be watchful of your belongings and cash.

One popular scam is credit card skimming. This is common at gas stations and at ATMs, as these places can be set up to capture your card information and enable scammers to use it for fraudulent transactions.

To protect yourself, take these steps:

• Prevent people nearby from seeing your personal identification number (PIN) when you enter it at the ATM.
• Don’t give your passport or credit cards as a security deposit to tour operators or others.
• Avoid overindulging at local bars. Doing so can cause your judgment to be compromised, allowing unscrupulous people to take advantage of you.
• Don’t keep all of your cash in one place. Split it between your wallet, money belt, or hidden pockets to avoid losing everything to one mishap.
• Check payment terminals and ATMs for skimming devices before using them.
• Keep your phone on a lanyard attached to your wrist if you need to use it in public to avoid snatch and grabs.

Pickpockets also present a hazard to unsuspecting tourists. Based on tourist reviews, popular tourist spots such as Barcelona, Amsterdam, Paris and Rome tend to attract pickpockets who prey on tourists, so be careful in these types of destinations. Pickpockets may operate alone or in a team, with one person distracting you while their partner takes your wallet.

Be watchful when shopping with street vendors too, as they could compromise your credit card or give you incorrect change. And while most merchants are reputable, some may well team up with pickpockets and distract you while their partners ply their trade on you.

Consider getting travel insurance

You may also be wondering if travel insurance is worth it. This sort of insurance offers protection against medical emergencies, trip cancellations and lost baggage.

However, note that many top travel credit cards also come with travel insurance benefits that protect you from the fallouts of canceled flights (including a potential hotel stay) or lost baggage, assuming you use the card to book your travel. Medical expenses that your health insurance won’t pick up could also be covered by your credit card’s travel insurance.

If you’re on an extended international trip, though, it may be a good idea to take out a separate travel insurance policy. These types of policies are available on a one-off or annual basis, and they can be used to cover any shortfalls between your card’s travel insurance and your medical insurance. Take the time to evaluate any travel insurance or card benefits you already have access to before deciding whether a standalone policy will be worthwhile.

What to do if you’re robbed abroad

As a tourist, you may be vulnerable to being robbed. Be especially careful when you’re in a crowded area, as pickpockets could sense an opportunity to take advantage of you. That said, it may not even be a physical assault that you fall victim to. You could have your card information or other sensitive personal information stolen if you use unsecured public Wi-Fi, use an ATM with a card skimmer or lose your cards.

To minimize the impact of an attack, don’t carry more cash than you anticipate needing for the day. Also, be careful with your mobile phone, as it contains a lot of information about you, potentially including your credit card and bank information.

In case you do end up getting robbed, immediately contact the local police station and file a report. You should also get a copy of this report for when you file an insurance claim. If your credit card is stolen, get in touch with your bank — and if it’s your passport that thieves get away with, get in touch with the nearest U.S. embassy ASAP.

If your credit card information or other personal information is compromised, it’s also a good idea to keep a watch on your credit report (assuming it hasn’t already been frozen). That way, you’ll know right away if a fraudster takes out credit in your name.

Frequently asked questions

• Where is the best place to keep your passport and money while traveling?

  It’s a good idea to get a money belt that is inconspicuous and stores money and other documents close to your body. You should also make a copy of your passport to store at your hotel, along with any extra cash. Take a picture of your passport to store on your phone, too.

• What does travel insurance cover?

  Travel insurance typically takes care of expenses you might incur due to flight cancellations and lost baggage. It may also cover the costs incurred as a result of medical issues, depending on the type of policy you take out. Look into the specifics of any travel insurance you purchase, and keep in mind that some credit cards offer travel insurance as a benefit that could cover your needs without requiring a separate travel insurance policy.

• Are hotel safes safe?

  Hotel safes are a backup place to store your money, documents and other valuables within your hotel room. On the whole, they tend to be safe. However, it’s still a good idea to do your research and select a hotel that hasn’t had complaints about stolen property, as well as having a backup plan for each item you plan to store in the safe in case it is compromised.

The bottom line

Traveling can be a life-changing experience — make sure it’s a good one by protecting your money when you venture from home.

Credit cards offer the safest way to spend money while traveling thanks to their robust fraud protections, but it’s still smart to set up account alerts and be on the lookout for scams while you’re traveling.

If you do carry cash, carry only the amount you need and keep it in a secure money belt or interior pocket of your jacket.

With some planning and common sense precautions, you can protect your money white you travel and focus on enjoying your adventure.