An international SIM card or travel SIM card allows you to connect to a local network in various countries around the world. In this manner, you can avoid excessive roaming fees that your local operator or carrier may charge when you are abroad.
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I usually put it in a zip-lock bag (always good to carry extra bags when traveling) and keep it with the rest of my electronics/chargers/etc... Another option I've used is to stash it in one of the little plastic cases SD cards come in. Even if the SIM card is smaller than an SD card, it will be fine in there.