On my most recent trip to Spain, I decided to use credit cards for traveling as much as possible forgoing my usual method of paying cash for most things. Why? I tested the waters on this payment method while in Japan in June because I did not want to hassle with dealing with all the currency exchange necessary. I also did not want to figure out the exchange rates for these small purchases like snacks, food, beverages, and meals.
When using credit cards while traveling, it was interesting to note that you were offered to use the type of currency you wanted right on the credit card terminal. On my last trip to Spain it was Euros or Mexican Pesos. I had seen this occasionally before, but it was offered every time in Spain. Must be their credit card processors system to gain more fees? This was because the typical exchange rate was not the best rate on the terminal vs. what I received at my bank. I was not sure about this until I took note of what the amount was on the terminal choices and then compared it to the charge when it hit my bank on my banking app. In my case it was 20-60 pesos more charged on the terminal!
Once establishment made a comment to me that they are charged a higher processing fee as well when a client chooses their home currency. I am not sure if this was true, but I would not be surprised to see these banks trying to make as much money as they can.
But the convenience of using the card, even at the toll booths beat trying to figure out the cash. I noticed that 90% of the locals also used their credit or debit cards and most had that wireless symbol on the card allowing them to touch the terminal. My VISA did not have it, although my American Express did. Another convenience, but also more security risk because it no longer required a PIN to confirm the cardholders identity? But all the terminals had slots to insert the card which required the PIN, so I would recommend that method vs. the touch and go way.
Although I used a credit card for almost all of the purchases I might have, I still carry a few hundred dollars in the local currency to buy waters, snacks, and ice cream. I was surprised to see that in Japan it was necessary in a lot of the small shops vs. Europe where everyone accepted a credit card. There was never a cash only situation.
Of course using a credit card that does not charge international fees is a must! Those pesky fees can eat up all the gains you have made with the better exchange rates. My Mexican credit cards seem to not charge any transaction fees, but maybe they make it up in the exchange rates? Certainly still better rate than I would get exchanging cash. I did get more cash from an ATM as well and did not see any fees and the exchange rate was acceptable.
In conclusion, I found a way to get the best way for me to use Credit Cards while traveling by getting the best exchange rates and I find myself using the credit card while traveling more often on each trip abroad.
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