Cash vs. credit card

It’s always a big question before traveling abroad, what’s better for you: switching cash or using your credit card at home? In our example, we calculated an average trip to Croatia for a total of € 500 for 7 days and an average daily spending of 500 kroner. We also calculated a toll of 500 kunas. So our total cost is 500 euros and 4,000 kunas. Let’s look at our options!

variant: we pay everything in cash

In the above case, the required EUR 500 is today (23.07.2017 afternoon) at the cheapest exchange rate, calculated at the rate of EUR 326. Rs 4,000 and Rs 178,800 at Rs 44.70. It is important to know that exchange rates may change several times during the day.

Based on the above, we need to switch to a total of $ 341,800. In case of cash changeover, we also have to pay a transaction fee of HUF 1,025 (3 thousandth of the amount exchanged), so our total cost is HUF 342,835.

Remember, if you do not have cash at home, you can even pay a cash withdrawal fee when you run out of monthly credit – the law guarantees two free cash withdrawals per month up to a maximum of $ 500 per month.

It is only possible to exchange the euro at home and then in Croatia to convert to Kunka as needed. In this case, however, we fail twice in conversion (from HUF to EUR, and from HRK to EUR), and we also have to look for currency exchange in Croatia. We may not be doing well with it. It is also unlikely that we will get a better exchange rate if we convert our forint into Croatian koruna.

The dangers of cash

Everyone knows how dangerous it is to take a lot of cash to the beach, to your accommodation or not to keep it in your car. A possible exchange rate gain of a few thousand forints may not be worth the risk of having a lot of cash.

Another question is what will happen to the remaining foreign money. Either we redeem it and write off the loss, or spend it abroad for unnecessary things. We may also bring it home and store it for your next trip – but in many cases, thousands of forints remain in your account …

Whatever we can, we pay by credit card and the rest by cash

Whatever we can, we pay by credit card and the rest by cash

We assume that we can pay by credit card. Smaller accommodation is not possible, but you can expect a guest house or a travel agency in Croatia, for example. Highway toll gates generally have card-only gates, and they often run quicker than cash, so we took the option of paying by card at the highway. The card is not accepted everywhere, especially at the beach and in the parking lots, so half of the daily spending (250 * 7, totaling 1 750 Kunas) is paid in cash and the remaining 2 250 Kunas is paid with a Hungarian credit card.

Before we get into the numbers, let’s see what happens when we pay by card with our forint account abroad. If you have a Mastercard card and pay in a country using the Euro, you will usually buy a Euro from your own bank using the currency exchange rate of your bank and your account package. If you have a Euro account, your bank may allow you to pay for it directly, so you do not have to pay the foreign exchange costs. With a Visa card, you can buy a Euro at your own euro selling rate, which is generally more favorable than that of commercial banks.

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