DURING the early days of international bicycle touring, cyclists would hide coins and valuables in the tubing of their bicycle frames to evade robbers.
On a 1,300-mile bike tour of Spain and Portugal last year, Steven Sweedler of Plymouth, N.H., found it easier to stash an ATM card in his pocket.
"When I land at an airport, I get 200 to 300 euros from the nearest ATM and then pay for lodging and meals with cash," said Sweedler, who has taken six trips overseas since 2001. He refills his wallet as he goes, which works fine in Europe, where ATMs are easy to find.
How best to handle money while traveling has been a quandary since the time of the caravans. Thankfully, credit cards, banking networks and the ATM have made it convenient to obtain foreign currency and complete financial transactions overseas.
But convenience isn't always cheap. Travelers will find that a little research will save them money and trouble.
Traveler's checks, ATM and credit cards, a wad of cash -- each has pros and cons. That's why experts suggest carrying a diversified travel wallet.
ATM and credit cards. See what the options are in your wallet. Call the customer service numbers and ask the banks and issuers how they calculate the exchange rate and what extras they tack on for purchases in a foreign currency. These vary by bank and by card.
If you're taking the ATM option, Bank of America is one of the better ways to go -- but be careful to follow the rules. Typically, BofA charges 1% over the wholesale currency exchange rate and a $5 fee for overseas withdrawals. Tack on a local bank fee, and you can be paying a hefty 6% or more for grabbing 100 euros from a Berlin ATM.
But if you seek out bank machines that are part of the Global ATM Alliance there are no transaction fees, said BofA spokeswoman Betty Reiss. There are 27,000 such machines worldwide including the ATM networks of Scotiabank in Canada; BNP Paribas in France; Barclays in Britain and parts of Africa; Deutsche Bank in Germany, Poland, Spain and Italy; and Westpac in Australia, New Zealand and the South Pacific.
BofA doesn't treat its credit card customers nearly as well. They pay 3% over the wholesale exchange rate in premiums and transaction fees, Reiss said.
There are better credit card options. American Express charges its customers a 2% premium over the wholesale exchange rate. Automobile Club of Southern California members can obtain a Visa card with just a 1% foreign transaction fee, said spokesman Paul Gonzales.
Traveler's checks. These remain a tried-and-true method of carrying money on vacation. If you are careful to store the receipts separately from the checks, you can quickly get a refund, making them one of the safest forms of overseas funds.
But they are rarely the cheapest, said Ron Archer of Archer Travel Services Inc. in Glendale.
There's a 1% fee upon purchase (though many banks will waive the purchase fee for good customers), and tourists can encounter service fees and higher exchange rates when they are redeemed, he said. As long as it is a recognizable issuer, the label on the checks isn't important.
"People are really comfortable with traveler's checks, and they feel secure with them," said AAA's Gonzales. "But more places now take credit cards than traveler's checks."
That's what cyclist Sweedler and his traveling partner found when they rolled into one town in Spain. "The banks there would not take the check of the guy I was riding with," Sweedler said. "We had to go to four [banks] to find one that would cash one, and the exchange rate was not as good as the money I was getting out of the machine."
One way American Express is addressing that problem is with a traveler's check card. A customer preloads a certain amount of cash onto the card, which can be used like an American Express credit card. If it is lost or stolen, American Express replaces any unspent funds within 24 hours.
Changing cash. "I don't suggest changing a large amount of money at an airport," said Amy Ziff, Travelocity's travel advisor. "That is the way to pay the most in fees and get the worst exchange rate." Ziff and others suggest taking a small amount of the currency of the nation you are going to land in, perhaps enough for a cab ride, a meal and any airport incidentals, but be smart about where you get it.
On a recent Monday, for example, ICE Currency Service in Los Angeles International Airport charged customers $1.93 for a British pound and $1.34 for a euro, plus a $4.95 transaction fee. But on the same day at the same time, discount exchanger International Currency Express in Beverly Hills asked $1.84 for a pound and $1.26 per euro and charged a $2 transaction fee. So 200 euros would cost $272.95 at the LAX exchange kiosk and $254 at International Currency Exchange, a 7.5% difference.
"It might not be convenient to carry lots of cash with you," said Lars Hansson, owner of International Currency Express, "but we can get people a good rate, and travelers can take $300 to $400 of cash in the currency they need when they leave." He stocks 40 currencies and can obtain more exotic bills within a day or so.
AAA offers a pricey but convenient TipPak: For $100, it sells $93 in pounds or euros at any office. With advance notice, the auto club can also get Japanese yen, Mexican pesos or Canadian dollars.