Cash: what is it, and should you take it with you on a trip or while backpacking?

What is cash?

• Cash is physical money in the form of coins and banknotes. It is the opposite of digital money (such as debit card payments or mobile apps).
• It varies greatly per country whether cash or digital payments/debit cards are the norm. Some countries hardly use cash anymore, in other countries you can hardly use a debit card anywhere.

What can you use cash for when traveling and backpacking?

• Cash is often indispensable for:
  • street food and local markets.
  • local transportation.
  • small hostels or homestays.
  • tips.
  • a visit to the toilet.
  • areas without debit card facilities or electricity.
• Cash is also useful in the event of a cash machine malfunction, when your bank card does not work abroad or if you have lost your card.

When do you take cash with you when traveling or backpacking?

• When arriving in a country with few debit cards or when you arrive at night.
• When traveling to remote areas (mountains, countryside, islands).
• During festivals, hikes or long bus rides. If you suspect that the local currency is unstable (sometimes it is better to take USD or EUR).
• But: never carry too much cash at once due to risk of loss or theft.

Where else in the world can you buy or get cash locally?

• ATMs – often the best exchange rate, but watch out for transaction costs.
• Exchange offices – check the rate and avoid exchangers on the street.
• Hotels/hostels – sometimes they exchange small amounts, but often at a bad rate.
• Via an app such as Western Union – useful if someone can send you money.

How can you insure cash through your travel insurance

• Most travel insurance policies cover stolen cash up to a certain amount (often between €100 and €500), but:
  • Only if you report it to the police
  • Only if it was stored safely (e.g. in a safe or money belt)
• Keep proof of withdrawal or exchange transaction, you will usually need this for a claim.