If you've ever been stuck in the backblocks of Africa or the jungles of Kalimantan with nothing but a credit card and not an ATM in sight, then you have learned the first law of overseas travel the hard way.

"We recommend the mixed wallet," says the head of retail products at the Commonwealth Bank, Michael Cant, who echoes the advice of everyone in the travel money business.

"Take a combination of cash, a travel card and either a credit or debit card. Travellers cheques are declining in usage but we still offer them," Cant says.

As well as recommending the mixed wallet, the head of foreign exchange services at American Express, Nick Dinopoulos, urges people to shop around and buy their travel money before they leave to lock in favourable exchange rates.

"Exchange rates are surprisingly different from the airport to a downtown location," he says. "There can be a 6-7 per cent variance depending on where you buy foreign currency."

The head of travel products at ANZ, Greg Drumm, says the exact split of currencies and methods of payment will depend on your circumstances, where you go and what you do there.

Travelex has an online guide (cashpassport.com.au) to the mix of travel money recommended in different destinations and a budget calculator showing the approximate cost of everyday items in local currency.

Seasoned travellers recommend taking some local currency in cash to pay for a taxi to your hotel, tips and coffee or a snack. All major airports have ATMs and foreign exchange counters but their rates are often poor.

The downside is that carrying large amounts of cash can be risky and, if lost or stolen, it's gone for good.

TRAVEL CARDS

Travel cards that can be loaded with foreign currency before you leave home are the biggest development in travel money in recent years and Australians are the most enthusiastic users.

The marketing manager of Travelex, Nik Ehnbom, says his company, the world's largest issuer of travel cards, sells more of its Cash Passport cards in Australia than anywhere else.

So it's hardly surprising ANZ and, most recently, the Commonwealth Bank have launched their own products.

Commonwealth's Travel Money Card allows customers to hold multiple currencies on one card, whereas its rivals' cards offer a single currency.

The Travel Money Card offers nine currencies - US, Australian, Canadian, New Zealand, Hong Kong and Singapore dollars, euros, British pounds and Japanese yen - which can be withdrawn at ATMs displaying the MasterCard sign and merchants.

The ANZ Travel Card has six currencies, while Travelex has seven on its ATM-only Cash Passport and five on its new Cash Passport debit card. ANZ and Travelex use the Visa network.

An analyst at ratings group Canstar Cannex, Peter Arnold, says the Commonwealth card is convenient when you travel to, say, France via the US and Britain.

"Instead of having only US dollars to spend, you can also have British pounds and euros ready to go. You can also transfer funds between the available currencies free of charge whilst travelling, at the prevailing exchange rate," he says.

However, Arnold says if you use any of the cards for a currency not loaded on the card, there's a cross-currency conversion fee of about 2 per cent.

"We recommend if you go to a country with a currency we offer then buy that one. If not, buy Australian dollars but there will be a foreign exchange conversion fee each time you use the card," Ehnbom says.

The cards typically allow a maximum of $25,000 loaded upfront for a flat card issue fee of $11 at Travelex and ANZ and $15 at the Commonwealth.

The cards can be reloaded online or via SMS while you are away. Ehnbom says this makes them especially popular with gap-year students who can ask mum and dad for top-up funds.

Reloads typically attract a fee of about 1 per cent of the total value.

The cards are PIN-protected and have a three-year expiry date. Any money remaining on the card when you return can be cashed in.

Ehnbom says the key advantage of travel cards over credit cards is that you can load the card in a foreign currency before you leave home and know exactly what the exchange rate is, with no conversion fees or transaction fees every time you make a purchase.

Ehnbom says ATM coverage is good everywhere except parts of Africa and South America.

DEBIT AND CREDIT CARDS

Most people already have a transaction card linked to their bank account and a credit or charge card in their wallet.

Credit cards come into their own for large, unplanned purchases, like the Persian rug you fall in love with in a Turkish market. They are also useful when checking into a hotel or hiring a car and a refundable deposit is deducted from your card.

The higher credit limit on credit cards also offers a safety net to get you out of trouble quickly in an emergency. Cant says customers can call into a local bank displaying the Visa or MasterCard sign, or phone their toll-free number, to organise an emergency cash advance.

But spontaneity and convenience come at a cost. According to Canstar Cannex, currency conversion fees average 2.72 per cent of the value of each transaction. Further, you won't know the exact exchange rate until you receive your next credit card statement.

Credit cards also attract ATM withdrawal fees of $4 to $5.

Drumm points out that you can use a debit card such as the ANZ Visa debit card at merchants and ATMs, whereas your domestic bank transaction card can be used at ATMs only.

However, some people may prefer the security of knowing that by using their transaction card, their spending is limited to how much they have in the bank. Currency conversion costs are the same as for credit cards.

Arnold says security poses more of a problem for credit cards than the new travel cards or travellers cheques. "If someone gets your PIN and uses it, the liability [for fraudulent use of your card] falls on you," Arnold says.

With signature cards, most providers will reimburse you for unauthorised use of your card.

Cant says most European countries now require a PIN so be sure to make note of it before you leave home because your signature may not be accepted. "If you have an old card without a chip and you travel widely, get your card reissued with a chip," he says.

TRAVELLERS CHEQUES

With the advent of plastic money, global ATM networks and internet banking, travellers cheques may seem old-fashioned but they have their place.

"When all else fails, when your cash or wallet is stolen, travellers cheques come into their own," Dinopoulos says.

"Seasoned travellers recognise that the product never expires and that it's a form of insurance. It gives you security, the ability to budget and to lock in a rate upfront," he says.

Travellers cheques are widely regarded as the most secure form of travel money. This is because each cheque has a serial number that can be traced. You sign on purchase and take a note of the serial number, then sign again with proof of identity when you exchange it for cash at a bank, foreign exchange bureau, hotel or retailers.

If you report your cheques lost or stolen, they can be stopped and you will be issued with replacement funds, generally within 24 hours. Cheques are invaluable in remote regions where technology is unavailable or unreliable.

However, Ehnbom says acceptance of travellers cheques across Europe is low, with their use often limited to hotels and banks where encashment fees can be high. You also have to rely on banking hours and must carry ID to cash them.

Dinopoulos suggests you plan ahead to get the best deal. For example, you can order fee-free cheques from Australia Post outlets, whereas banks and American Express outlets typically charge 1 per cent of the total amount.

There is no foreign exchange conversion fee if you buy the currency of the country to which you intend to travel but there may be an encashment fee that will vary between countries

and providers.

Dinopoulos recommends going online (americanexpress.com.au) to look for fee-free encashers and where encashment is available.

"If you plan correctly, there can be no fee when you purchase, you can lock in your exchange rate and there can be no encashment fee," he says.

CHECKLIS

* Take travel money in a variety of forms.

* Check your credit card expiry date.

* Let your card provider know you're going.

* Get a PIN for your credit card.

* Set up internet, phone and mobile phone banking.

* Take bank emergency numbers.

* Keep emergency cash.

Source: ANZ

Some cash and a credit card and this world traveller is good to go

Tim Richards is just back from Montana and North Dakota. Before that it was Thailand, Malaysia, China, Poland, Lithuania, Slovakia and Britain.

A freelance travel writer, Richards normally jets off in a hurry armed with about $100 in local currency and a credit card that he's loaded with enough cash to cover his expenses. He then withdraws local currency from ATMs as he needs it.

"It's remarkable how easy it's become to find an ATM; I don't think I've been into a foreign bank [to cash travellers cheques] for years," he says.

In Poland last year to update a Lonely Planet guide, he was surprised to find waiters used the latest chip and pin technology to validate his credit card at the table — a practice not yet widespread in Australia.

"Somewhere along the line a few years ago I moved from travellers cheques to cash withdrawals. Anywhere there's a city these days you can find an ATM, although I haven't been to Africa or the central Asian republics," he says.

However, he acknowledges there are still some pockets of the planet where the advance of technology is slow and travellers cheques are useful. On Easter Island four years ago, the single ATM did not accept his credit card so he had to change travellers cheques at a bank that only opened for half a day.

He concedes the new travel cards might be better value than credit card cash withdrawals and plans to look into them. "If I lost my credit cards, I might look a bit silly but I've had no problems with fraud," he says.

When paying by credit card in a restaurant, he suggests paying at the table so your card isn't whisked into the kitchen and out of sight.