When was the last time you pulled out cash to pay for something? Many Canadians might have to think long and hard, especially if they’re younger.
Canada has gradually moved toward becoming a cashless society, with most people paying for purchases with smartphones or credit cards. However, whether or not you should carry cash—and how much—can still be a point of contention when travelling abroad.
How much cash should Canadian travellers carry?
“The question shouldn’t be whether cash is still worth it, but it’s how to use it wisely, especially when every dollar counts,” said Amra Durakovic, a spokesperson for Flight Centre Travel Group Canada Inc.
She said the decision to carry cash and the amount depends on the destination, purpose of travel and how prepared a traveller wants to be.
When Durakovic was travelling to Nicaragua, she knew the airport transfer cost and driver tips would likely be a cash-on-hand situation. For her Morocco trip not too long ago, she said she carried small bills in U.S. dollars when visiting local markets and to pay for taxis.
Even if you’re going on a cruise or to an all-inclusive resort, carry some cash for tipping staff, Durakovic suggested.
“We would recommend that you do carry a modest amount in bills, ideally in the currency that’s most widely accepted locally,” she said.
Durakovic said she personally takes at least USD$100 in cash when travelling abroad, mostly in smaller bills. She also emphasized paying gratuities on all-inclusive trips in Canadian dollars ahead of time to avoid exchange-rate surprises or finding out there are no ATMs on-site at the resort.
Sometimes, all-inclusive resorts and cruises can include gratuities in a daily service charge, allowing travellers to account for tips in their budget ahead of time. Prepaid gratuities are typically broken down per night and per guest. For example, Disney Cruise recommends a prepaid gratuity of between USD$16 and USD$27.25 per night, per guest.
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Pay attention to currency exchange rates
When Nicole Hui was preparing to travel to Japan earlier this year, one of the first things she researched was whether it’s a cash-reliant economy.
The travel and lifestyle content creator said she brought some cash to cover the initial transit from the airport, meals and tipping. But she took out money she needed after that from an ATM at a Japanese 7-Eleven—with a better exchange rate than what she would have received at Canadian banks.
But usually, Hui’s go-to is her no-fee credit card. “If it’s a less cash-heavy place, I usually just stick with using (a credit) card, but still bring $100 to $200 of local currency for the trip, just in case it’s needed,” Hui said.
But experts say exchange rates should be kept top of mind when travelling abroad.
“My issue with cash going abroad is it’s really expensive to exchange, depending on where you’re going,” said personal finance and travel expert Barry Choi.
Choi’s turning point was when he travelled to Brazil and Argentina almost a decade ago and faced an exorbitant exchange fee at the bank.
Ever since, Choi said, he prefers either a no-fee credit or prepaid cards, or he will withdraw money at ATMs abroad, if needed.
He advised looking for a travel card that allows charge-free ATM withdrawals, credit cards with no or lower exchange-rate fees, or a multi-currency card, such as Wise. He does not recommend exchanging money at the airport.
Converting back to Canadian dollars may cost you
Choi’s decision to carry cash and the amount comes down to researching what the acceptable currency is in the country he’s visiting. He recalled travelling to the United States earlier this year and not using cash once during his trip.
Another downside to getting cash is the leftover local currency you may never use, Choi said.
“Why I tell people to carry less cash is: Back in the day, you would keep exchanging all this money, you’d pay high fees to begin with, and then you’re left with these random currencies that you may or may not use,” he said.
There’s a chance of losing money when exchanging leftover local currency for Canadian dollars, depending on the exchange-rate fluctuations.
But Choi said he still carries USD$50 in local currency that can cover a meal or taxi ride, just in case.
“There are still a lot of stores that only take cash, so you could be in the middle of nowhere or even a country where you don’t speak the language,” he said. “You should always have some kind of backup cash, even if it’s U.S. dollars, Canadian dollars, or whatever.”
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