Credit card, airline ticket on top of tablet computer © conejota/Shutterstock.com

It’s the vacation version of the old grocery store conundrum: cash or plastic?

For most instances a credit card is the best bet when you travel, hands down. But when you want to get a little spending money, an ATM card is a great resource.

Here are a few tips to smooth out the financial wrinkles and give you that hassle-free vacation you’ve been planning:

Credit cards

1. Select cards for overseas use. For an international trip, find which cards you’ll be able to use. In certain parts of the world, some cards will be accepted more widely than others, says Clark Howard, co-author of “Get Clark Smart: The Ultimate Guide to Getting Rich from America’s Money-Saving Expert.” Check a couple of good guidebooks to find out which cards will give you the most options in that area.

2. Ask about fees in advance. If you’re leaving the U.S., ask about fees. Call the issuing bank and find what kind of fees it charges for using the card outside the U.S. Many institutions charge additional fees — flat rate, percentage or both — for foreign transactions. “Most people don’t think to ask, or know to ask,” says Howard.

Look for a foreign currency exchange fee or foreign transaction fee, says Howard. What can be really galling: Some banks will add them to the bill even if the merchant conducts the transaction in U.S. dollars. Take the cards that will cost you the least to use. If you belong to a credit union, see if its credit card might offer a better deal on overseas travel.

Even if you think you know your credit card bank’s policies, check again. “A number of major credit card issuers recently made substantial increases to the nature and amount of the fees they charge for foreign transactions,” says Edward Hasbrouck, author of “The Practical Nomad” travel series.

In some cases, you’ll face a similar situation with ATM transactions. If there is a flat fee on every transaction, that string of little credit card charges can really skyrocket.

3. Carry lost/theft phone number. Before you leave for foreign ports of call, get the number to call if your card is lost or stolen. That 800 number you’ve got now probably won’t work outside the U.S., says Hasbrouck. But your card’s bank has another number and will share it if you ask.

Also ask what happens if the card is lost or stolen in the areas where you’ll be traveling. Many times, the issuer can courier a new one within 24 to 48 hours.

“Before you leave for foreign ports of call, get the number to call if your card is lost or stolen.”

4. Tell card issuer your plans. If you’re going to be making charges in another country or an area of this country that’s outside your normal pattern, let the card company know ahead of time. Otherwise, their fraud department could see all that unusual activity and shut off your charging privileges.

During one hectic book tour, Howard visited five states in one day. One of his card companies noticed the unusual charging pattern and temporarily suspended his privileges. He had to call the card’s fraud department and explain. “It was a funny phone call,” he remembers. “I was exhausted. I told them, ‘Yes, I really was in all five of those states yesterday.'”

Usually all you need to do is make a phone call. But it’s even more convenient if it doesn’t happen in the first place. For a recent trip to Eastern Europe, he called the issuers before he left. “I knew if I didn’t call, I’d be sitting there very poor,” he says.

5. Prepare for emergencies. “If you have a safe place, like a password-protected contact on the Web, you need to have your account numbers there,” says Howard. That way, if your cards are lost or stolen, you can report them without having to call home and have someone go through your bills. “It’s great to have a list,” he says. “Even better, before you leave on a trip, purge your wallet of all the things you won’t need.”

6. Take cards from two banks. If something goes wrong and one of your banks shuts off your credit, you’ll have a back-up card until you can straighten out the situation, says Howard. But if all your cards are from the same bank, you’re stuck.

7. Check your credit limits and expiration dates. You want to find out how much you can spend on each card and know that it will work for the duration of your trip, says Mai Lee Ua, public relations associate with Discover Financial Services.

8. Keep all receipts. “You don’t have the same dispute rights when you use a card outside the U.S.,” says Howard.”That’s why it’s so important to keep a copy of every charge slip.” Otherwise, if the merchant makes a mistake or puts through an amount that’s higher than you approved, and you don’t have your original slip, you’ve waived your rights, he says.

And hang onto them for a good long time, just in case anything questionable appears on your bills.

9. Try to use just one card. It’s far easier to reconcile your spending when you get back and it allows you to have more discipline, as far as your budget.

10. Make sure certain card is accepted. Even if the merchant has your card’s insignia on the door, ask if the card is accepted. When Howard went to Prague recently, he discovered an interesting phenomenon: Restaurants would sport credit card logos on the door, but when he tried to pay with one of those cards, management would tell him they don’t take those cards. The decals were almost like a status symbol, he says. But they didn’t really mean anything.

Howard’s advice: Ask first and carry a little cash to pay for your meal “or you might have a quick case of indigestion,” he says.

11. Beware of double billing. Sometimes at hotels or car rental locations, travelers will use a credit card to hold the reservations but pay the bill with cash. Bad idea, says Howard. If the clerk is unscrupulous or sloppy, you could get billed twice. And if you don’t have your cash receipt, there’s nothing you can do about it.

Smart money: If the establishment already has your credit card number, use that card to pay the bill.

“Your trip isn’t really over until you’ve paid the tab.”

12. Watch out for tip hogs. At some locations, such as restaurants, the charge card slip leaves a blank for you to add a tip. But if you’ve tipped cash, fill in the blank with the words “on table” and fill in the total charged at the bottom of the slip, says Howard. That prevents anyone from adding a little extra to your tab.

13. Clarify purchase guarantees. On a cruise, “you have no charge-back protection,” says Howard. Often, cruise lines will recommend certain shops to travelers. Find out first what kind of guarantee the cruise line offers if you’re not happy with the merchandise in stores it recommends and get it in writing, he says.

14. Remember cards are safest. “The reason to use plastic when you’re traveling is so you’re not walking around with cash if you get robbed,” says Hasbrouck.

And a money belt, for valuables such as passports, credit cards, ATM cards and cash, is always a good idea. Just don’t let anyone know you’re wearing it or it defeats the purpose. “That’s where people get into trouble,” says Hasbrouck.

ATM cards

15. Check for ATM networks. Before you leave town, call your bank and find out if you can use the ATM card in the places you’ll be going. What kind of fees will you face for using an ATM away from home? If you’re traveling internationally, what are the fees for getting foreign money from the ATM (and is it a flat fee, percentage of transaction or both?) Are there any banks or ATMs in the area that are part of your bank’s network? What do you save by using the network?

Out of network, some machines will have “fairly substantial fees,” says Hasbrouck. That can be an unwelcome surprise for travelers.

16. Know your limit. Many ATM cards will limit the amount of money you can withdraw in a day. While you don’t want to be carrying large amounts of cash, you do want to know how much you can access in case of emergencies.

17. Leave debit cards at home. When you travel, it’s more secure to use a credit card than a debit card for shopping, hotels, meals and gas.

18. Use ATMs for cash. The rates are usually “much better than at a money exchange,” he says.

19. Scope out local ATMs carefully. Does the area look questionable? If so, skip it in favor of a machine in a more protected place, whether it’s inside the network or not. “Don’t take chances with that,” says Hasbrouck. “It’s the kind of thing that will get you rolled.”

When you return

20. Remember: card has to be paid. Realize that your trip isn’t really over until you’ve paid the tab. Toss all your receipts into one envelope, shoe box or folder. Then, when the bill comes in you can compare each to what appears on the bill. Check to see if:

  • The amount you’re charged matches your receipt.
  • The merchant or bank correctly calculated the exchange rate.
  • You were not charged more than once for the same purchase.

Says Hasbrouck, “People actually need to scrutinize their bills.”