Is Cash or Credit Better for European Trips?

A trip to Europe can be one of the more memorable voyages of your life. But the last thing you want to do is sour your voyage by finding yourself unable to pay for dinner or train fare while you’re there.

If a vacation or business trip is on the horizon, here are some things to keep in mind about using credit cards and cash in Europe. Being over-prepared can help you avoid a lot of trouble—and perhaps some missed sightseeing opportunities—while you’re traveling.

key takeaways

  • European travelers should always have some cash on hand; getting it from an ATM abroad is usually the easiest, most advantageous way.
  • Credit cards are generally accepted, especially in cities; but check with your card issuer about foreign transaction fees and currency exchange fees.
  • Contactless pay systems like Apple Pay are increasingly common.

Don’t Expect to Get Too Far Without Cash

There’s a lot that you can buy with a credit card in Europe, so bring at least one. But don’t expect to get very far without a little cash, too—especially if you’re a tourist. Transportation services, such as taxis and buses, often require local currency. The same is true if you hire a guide to help you navigate the unfamiliar surroundings.

Don’t bother to load up on cash euros, before your flight. You can simply visit an ATM once you arrive and withdraw euros—the currency of 19 European countries—or pounds if you’re visiting the United Kingdom. With a conversion fee between 1% and 3%, and sometimes a nominal transaction charge, ATMs can be one of the least expensive and most convenient ways to get cash overseas—though you might want to check out local currency exchange bureaus, just to compare rates.

If you have more than one bank account, you may want to compare the different international ATM fees beforehand and of course, go with the one that’s more economical. 

Using a Credit Card Abroad

Many businesses, particularly those that cater to travelers or are in cities, accept credit cards. Carrying plastic also cuts down on how much cash you have to carry, which eliminates some of the pain if your wallet is lost or stolen. Pickpockets are not uncommon in most European cities, and they know how to identify tourists.

If you’re planning to bring a credit card, there are a couple of things to remember. First, bear in mind that some cards are more widely accepted than others. MasterCard and Visa are among the most commonly used payment networks in Great Britain and the Continent. American Express, Discover and Diners Club are less widespread, though some merchants will take them.

You can use your credit card to get cash at an ATM, of course (and you may have to, if your bank card doesn't participate in an overseas network). Whether for cash or purchases, do check with the card issuer (or dig out your terms and conditions paperwork, if you can find it) to see if there's a transaction fee for foreign purchases or a currency conversion fee (or both!). They add up.

Some merchants now give you the option to pay with your card in either the local currency or in your own home currency (dollars or whatever). Paying in your own currency is a way to get around that foreign transaction fee. If your card doesn't charge one, you might as well pay in the local currency.

How to Ensure Your Card Will Work

It’s also important to realize that Europe's credit card technology is far more advanced, often using chip-and-PIN software. This means their cards have an embedded chip that helps validate the card's physical presence and legitimacy. Rather than signing a receipt, cardholders often enter their four-digit PIN code to complete the transaction. American banks have rapidly rolled out cards that have the chip due to changes in fraud liability laws, but the PIN portion is often still not the norm.

You may still get away with a standard American card, as long it has a chip. If it doesn't, the merchant will likely ask for your PIN. If you don’t know it—after all, PINs are rarely used for U.S. credit card transactions—it’s a good idea to get the four-digit number from your bank before embarking, or re-set it via telephone or computer to something easy to remember.

Also, remember to notify your bank that you will be traveling overseas. Many banks have enhanced their fraud detection protocols, and if they notice suspicious activity, such as an ATM withdrawal in Venice when you've never been there before, they could deactivate your card out of an abundance of caution.

Using Traveler’s Checks

If you’re worried about carrying a lot of cash, another option is to purchase traveler’s checks. The nice thing about these checks is that, as long as you record the number on each one and store it in a secure location, the issuer can usually replace them for free if they’re stolen.

However, traveler's checks are a dying breed; many places don't take them anymore. Even if a merchant accepts traveler’s checks, it’s often with a poor exchange rate. And they're costly: Banks may charge a fee worth 1% to 2% of the face value to purchase the checks.

One alternative is to carry a modest amount of emergency cash with you in a location pickpockets can’t easily get to—in other words, not in backpacks or an unsealed pocket. Few retailers or hotels accept personal checks, so you may as well leave those at home.

Going Digital

Increasingly, merchants throughout Europe accept Apple Pay and other digital "contactless" payment systems; Apple pay is accepted in over 60 countries as of July 2021. Doing it all with a tap of your phone can alleviate security concerns about having pockets picked and cash-filled wallets stolen.

If you use Apple Pay to pay with a card overseas, that card's same overseas charges, as discussed above, will apply. If you're using the Apple Pay Cash card to pay (it's accepted wherever Discover cards are), there's a 3% across the board fee for international transactions.

The Bottom Line

As the saying goes, “When in Rome, do as the Romans do.” These days, that means carrying a chip-enabled credit card and a little cash, just in case. Also, pack your bank debit card for ATMs to keep yourself supplied with additional coin, as needed.

Disclosure: At the time of publication, the author did not have holdings in any of the companies mentioned in this article.