Cash
Cash is still king in most travel destinations. So I always bring enough cash for at least a few days of travel. Although some hotels claim to accept credit cards, they may only accept local credit cards. Call in advance to find out if they also accept foreign credit cards. If in doubt, bring enough cash to cover the hotel expenses as well.
Using ATMs
The easiest way to obtain cash abroad is by using one of those ATM machines. First, take a look at the back of your card to find out if it works with the Cirrus network or the Plus network (see their corresponding symbols below). When you are overseas, look for ATM machines that show your card's symbol.
There are usually transaction fees associated with using ATMs overseas. You will need to check with your bank to get the details.
China
In China, major banks, especially national ones, accept foreign cards. For example, the Bank of Communications (交通銀行) has many ATMs across the country and I have had no problem using them. Best of all, there is no additional surcharge per transaction.
Japan
In a country where even the toilets are more advanced than most other countries, it is surprising that most transactions are still done through cash. Luckily, there are pushes to move society towards a cashless one. Before then, however, you will still need to obtain cash from ATMs regularly.
The good thing about ATMs in Japan is that they are everywhere. The ATMs in 7-11are the best because they typically don't charge extra processing fees. Some bank ATMs do charge a nominal fee of about 200 Yen per withdrawal. If you are limited to taking money from one of these ATMs, get as much as you can carry because the fees are per withdrawal.
Money Exchange Shops
As you travel from one country to the next, don't forget to exchange your previous currency for the new one. It is always a good idea to check the rates of different exchange shops and banks before you decide.
South Korea
In South Korea, you can easily exchange your money with any one of the banks. They do offer a very competitive rate. Besides banks, some money exchangers are also famous for their good rates. If you are in Myeongdong, the money changer at 26 Myeongdong 2-Gil is the most popular in town. There are numerous money changers there, compare their rates before you proceed.
Taiwan
Similar to South Korea, you can exchange your money with any one of the banks. If they are already close, however, some jewelry shops can also exchange for you. Although there are specific guidelines for money exchangers in Taiwan, their costs will vary.
Debit or Credit
Credit cards are often associated with a point collection system to reward you of your expenses. So, credit card is my preferred way of spending when you are abroad. However, choosing which credit card to use to minimize your cost of money requires some investigation. Here is a list of questions you will need to ask your credit card/debit card companies before you go:
- Is there a foreign currency transaction fee when using the card abroad? Usually, it's a percentage of the transaction amount. 2.5% is quite typical.
- Is there a per-transaction fee for any foreign currency purchase? In addition to a percentage fee, some card company charges an additional per-transaction fee when the transaction is in foreign currency. You will likely want to stay away from using these cards.
- Is there an additional fee when you withdraw money from a foreign ATM machine? Stay away from cards that charge this extra processing fee.
Once you have answers to the above questions, you may find out different credit cards are required for different purposes. For example, the Roger's Mastercard Elite is perfect for using abroad because it gives you a 4% points reward and only charges a 2.5% foreign transaction fee. So you will be netting a good 1.5% reward per transaction. However, this card is terrible for cash advances because it charges an extra fee for cash withdrawal. If you need cash, you will need to use a different card.
MasterCard or Visa?
In general, both cards are well accepted overseas. However, according to this article, Mastercard has a better exchange rate.
Is your Credit Card accepted?
Places that accept foreign credit cards (MasterCard and Visa) are South Korea, Taiwan, and Hong Kong. You will have a hard time using a foreign credit card in both Japan and China.
Cash Advance
One often overlooked feature of your credit card is cash advance. A cash advance allows you to take money out of your credit card. As we all know, a credit card carries a very high interest rate and with a cash advance, the interest is applied immediately. So most people shy away from it. However, you can avoid paying any interest if your credit card has extra money on it. For example, if you overpay your credit card, the extra amounts can be withdrawn from an ATM without paying interest.
Depending on the credit card you use, you may end up pay fewer transaction fees than using a debit card.
Electronic Payment
When it comes to electronic payment, China is well ahead of most countries. Most transactions can be done through either WeChat or Alipay on your smartphone. Up until recently, you can only use WeChat Pay if you have a China Bank account. Starting in late November 2019, however, you can add a foreign credit card to WeChat Pay. Alipay has a mini-program called Tour Pass that allows you to add money to its wallet. I have not used either to give recommendations.
Since it is well known that the China government has access to all WeChat messages (even deleted ones), it is not a far-fetched hypothesis that they may also have access to all financial activities through the WeChat app. If you are concerned about this, your other option is probably cash. Credit cards, especially foreign ones, are not well accepted in China.