It sounds like a country-western song, but you need money to make it on the road. Food, lodging, transportation, activities, each require you to pay and pay alike. Unfortunately, to best know how to spend your money practically requires a degree in economics. With fees, limits, percentages and acres of fine print it’s extremely difficult to avoid being nickled and dimed.

Here’s your how-to for avoiding the dreaded “fee fatigue.”

Remember the general guideline – use your credit card for purchases and your debit card for cash – and you’ll be on the right track.

Cash

Think of it this way, Cash is King. Everyone accepts it, so you should have at least a little on you at all times no matter where you go. So, how do you access it without unnecessary expense?

• Exchange your cash before arriving in your next country. Exchange rates are most favorable outside of the country whose currency you’re looking for, and can be as much as a 5% difference.
• Avoid exchanging currency at airports or near tourist sites. The most convenient exchange outlets have the least favorable rates – walk a little and save yourself money.
• Use an ATM machine to get the best exchange rate availble (see next section). If you’re arriving without local cash, get it from an airport ATM or bank, not the currency exchange.

Since cash is so easy to lose – and steal – only carry a modest amount with you. A crime or loss doesn’t have to be devastating to the rest of your trip.

ATM/Debit cards

ATM machines exist pretty much everywhere that has electricity these days, so your debit card will be the most convenient way to access cash. Unfortunately there are fees to use ATMs – up to five bucks per transaction on your home side and potentially more on the foreign side, so it’s in your best interest to keep withdrawals to a minimum. Taking more out with each withdrawal gives you a smaller percentage of fee per overall use, think $200-$300 with each transaction depending on your daily budget.

Expect functionality problems with ATM machines in developing nations, sometimes going down for days at a time with no apology or explanation. Try a different bank if this happens, the problem isn’t always system-wide.

Bring along a spare card that you can activate and use right away if your first card is lost or stolen. You’ll find it more convenient than having to get one mailed to you in a random location.

The so-called “chip-and-PIN card” system is being integrated into debit and credit card transactions in Europe and elsewhere, serving  to complicate the simple use of ATMs for cash. Read this article for more info about what this technology means for your cash survival.

Credit cards

Job #1 is to find the best travel credit card for purchase transactions, then use it. The biggest detriment, however, to using a credit card for everything under the sun is the foreign transaction fee – a charge on all the purchases you make overseas. If you use it a lot, this will certainly add up. The recent US government Credit CARD Act, while being generally beneficial, has only served to further complicate the travel card matter.

So which card do you want? The USA Today has outlined some of the best ones, but in summary, they’ve determined that the Capitol One card with their 0% transaction fee is the best traveler’s credit card out there. As an added bonus, it also has a “no-hassles” airline miles reward program, so you can earn miles on each dollar spent. What traveler wouldn’t like that?

Here is a list of foreign transaction fees from some of the largest US credit card issuers:

• Capital One – 0%
• Discover – 2%
• American Express – 2.7%
• Bank of America – 3%
• Chase – 3%
• Citibank – 3%
• Wells Fargo – 3%

Don’t forget: since credit card companies have the freedom to charge whatever exchange rate they want for transactions, you may end up paying more without even knowing it. American Express often gives more favorable exchange rates that even with their 2.7% transaction fee you can save money overall.

‡ Make sure to notify your bank before you depart for a foreign country. They’ll be quick to freeze your account when transactions start appearing thousands of miles from your home address. A quick phone call will save you all kinds of hassle.

Travelers Check Ad circa 1960

Travelers Checks

Even though romance of using traveler’s checks wore off long ago, their practicality still lingers — they’ll still come in handy if your robbed. Unfortunately, they’re nearly impossible to change outside of a bank. And because of their perceived decreasing value, many hotels won’t even change them anymore. And checks issued by companies other than the biggest one or two are pretty much worthless much of the world over. Best to avoid travelers checks if at all possible.

The “Cash Passport” card from Travelex

Basically a pre-paid credit card, it’s specifically geared toward the international traveler. The benefit is you don’t have to pay it off later, which is great in hindsight. Load it up before you leave and then collect or spend the cash worry-free on the road. Note that the Cash Passport also has a variable fee for transactions as well. There are also maximum limits on withdrawals and purchases. But like a credit card they offer purchase protection. This may be a great solution for the chip-and-PIN dilemma, as they’re building this technology into the cards they issue.

So, even though the fee labyrinth may be vast and fearful, it’s always best to research and read fine print before committing to anything. Hopefully these hints will help you commit more wisely.