We think it's a good idea to have a combination of both that way you are covered for a myriad of scenarios which could and do happen while traveling.
It's always handy to have a few dollars in the local currency before you arrive so you can catch a bus or taxi and not be forced to change money at the airport or border.
Most countries now have ATMs that dispense local currency to foreign cardholders. But there are still parts of Asia and Africa where cash is king and ATM's are non existent, so check before departure and if necessary, carry enough cash to tide you over.
Having some cash on you also gets you out of a bind, should your bank card get swallowed up by an ATM.
Try to get small denominations too, that way if some money is flogged, you're not losing everything or that scammer isn't getting away with much of your holiday savings.
Beware of bank fees associated with card transactions overseas and withdrawing cash from foreign ATMs: check with your bank/provider before departing. Also check the expiry date on your card and that it will be accepted where you're going.
Let your bank know when you are going overseas and when you will return in case of suspicious transactions post holiday. Also so they don't block you out when you start using the card overseas.
Keep a copy of the emergency assistance numbers for your bank somewhere safe should your card get stolen or swallowed by an ATM. Some travel insurance companies may also cover the cost of replacing the card if it is stolen.
An important note about cards if you are taking both a travel money card and credit cards. Most hotels and cruise ships will not accept travel money cards as a form of charge card when checking in or for tabs due to no name being present on the card so it's important to also take a card with your name on it.
It's a great idea to prepare a small 'Emergency fund' which is usually about USD300 dollars cash and is split up and distributed across all your gear (deep inside the lining of each of our rucksacks, under the soles of our shoes, inside jacket linings etc). That way you have at least something to tide you over until you can get more money out or get that replacement card.
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