I recently read an article on CNN.com with some tips on managing currency exchange when traveling in Europe. The author pointed out some excellent points for different methods of payment, which I can also comment on, namely:

• Cash. It’s a good idea to have cash backup, in the currency of the country you’re visiting, because it’s accepted everywhere. Many places you go, street vendors only accept cash, and it’s a quick and easy way to pay as you travel. It also eliminates issues involving security/identity fraud from handing out your credit or debit card.
• Credit Card. Although useful for high-price items, like booking transportation or lodging ahead of time, credit cards often incur transaction fees, sometimes from both the credit card company as well as the merchant. There is also some security risk should your card get stolen.
• Debit Card. Can be used for cash withdrawal at ATMs, but again, a service fee is often included. The cards are sometimes not accepted, depending on the bank, ATM or merchant.

Based on my personal experiences, I will not travel without cash or a quick means of attaining it. There is nothing worse than feeling like you can’t get out of a situation– or can’t buy that one knick-nack from a street vendor you really want– because the situation requires cash.

I don’t advise taking a ton of cash on your person for obvious reasons, but having access to it is essential. When I lived in Northern Ireland, I lived off of my AAA Travel Visa, which I’ve taken on all my travels since. You can load money on the card before your trip, I think there’s a $4 activation fee or some other insignificant amount, and then add money to the card throughout your travels. It acts like a debit card so you can swipe and sign or swipe and enter your PIN and you can also withdrawal cash from ATMs. The times I’ve traveled around Europe it has come in quite handy, allowing me to withdrawal cash in each country and in each country’s currency. You can also track your balance online by registering the card.

Best parts? First, it’s secure because every method requires a PIN or signature, and you can monitor the account to verify all activity. Second, there are no transaction/curency exchange fees. Third, you can use the card at home or transfer any remaining balance to your checking or savings account so you’re not out any money.

Happy traveling!