Tom Wilt: Hello! I am Tom Wilt, Managing Director AAA Partnership Programs, and today we are discussing the basics of international travel.

Now let's talk about the types of money to use on your international trip. You have your itinerary, your passport, your airline ticket, and your suitcases ready to go. Now you need to decide the best way to pack your wallet. That's right. Think of your wallet as a suitcase, a small one of course.

In order to protect your vacation funds and maximize convenience, international travelers use a combination of various forms of payment. Each are offering different advantages.

For years my travelers knew that credit cards were a great way to pay abroad. A credit card is safer than carrying cash, and may offer a great exchange rate in the bargain. However, be sure to call your credit card company prior to departure to notify them you are traveling outside the US and to determine what fees are applicable to international purchases and current conversion rates. These maybe as high as 3% to convert purchases to US dollars. Even with the surcharges, paying by the credit card may still be cheaper than exchanging cash overseas.

The advantages. Paying with plastic is quick and convenient. Many credit cards comes with traveler friendly features, including the extended protection against theft, an accidental damage of purchases, travel accident protection, car rental insurance, and the opportunity of dispute a bill from an international merchant.

Be sure to call your credit card company to determine all fees you will be responsible for, and to notify them when and where you will be traveling. So your credit card will not be denied, because your bank suspects fraudulent activity. I have had that happen, not pretty.

Another convenient option to consider is obtaining a minimum amount of foreign currency in advance of your travels. This is a great way for travelers to avoid high exchange rates at airports and ATMs and still have money on hand. Foreign currency exchange services can be found at several places outside of the airport.

Arriving with a few Euros or other local currency in your possession can be helpful with baggage handling and ground transportation when you first arrive at your destination.

I won't travel without some local currency in my pocket, especially if I am traveling outside a major metropolitan area. A refillable travel money card, which is actually a prepaid debit card that you can later add money to, offers travelers a safe and convenient supplement to traveler's checks and cash. The cards can be used most anywhere major credit cards are accepted. Travelers can also get local currency at ATMs around the world, an emergency card and cash replacement anywhere in the world during your travels.

Traveler's checks are not as popular as they once were, but they are still safer then carrying cash, as they are refundable, if lost or stolen. Most traveler's checks never expire and come with a 24/7 customer service replacement and may include additional benefits. They can be exchanged with local currency, most often at the bank at most destinations.

Be sure to make a list of numbers of all traveler's checks and contact numbers for all cards or traveler's checks to quickly and easily report them, if lost or stolen. Carry that list in a separate location other then your wallet at all times.

Carry only the credit cards and other financial products and identification cards needed during your trip. Reducing a number of bank cards you carry and leaving other non essential identification and membership cards at home, decreases your exposure to financial loss or theft.

Oh! And when a merchant ask you, if you like to have your credit card charged in US dollars, say no. It's a trick to charge you excessive exchange fees to the delight of the merchant.

To recap, the best option for travelers is to carry a mixture of plastic, local currency, and traveler's checks. All are forms of payment, should be treated like cash, and kept securely in your wallet.

So that's the basics of what types of currency to use on your international vacation. Next we will talk to you about how to save for and during your trip. Safe travels.