One of the most common travel questions is what is the best, and cheapest, way to get foreign currency when traveling abroad. It may seem like a complex subject, but technology and changing times are making it easier than ever.
Follow a couple of simple rules and you’ll be able to stretch your money even further while abroad.
Ignore Travelers Checks
Travelers checks are quickly becoming a thing of the past. What used to be one of the only ways to spend money while traveling are now rarely seen. Traveler’s checks come with high fees and some banks have even stopped carrying them altogether.
Don’t Exchange Currency Stateside
Because of awful foreign exchange rates inside the US you shouldn’t be tempted to acquire foreign currency before you leave. There are notable exceptions, like when traveling to Cuba.
Stick to Airport ATMs
Quick and convenient, almost every international airport is full of ATMs. As long as you take money out as you arrive you will be fine. Just remember not to leave the airport without some local cash.
If your trip is relatively short, I would say a week or shorter, try and only take out cash once. Before you leave estimate how much you will need for the whole trip and research if credit cards are accepted in most establishments. The less you use the ATM the less you will pay in withdrawal fees.
You can avoid ATM fees, and in turn take out cash as many times as you want, if you use a card that reimburses ATM fees. Many banks are beginning to offer this, but I suggest Schwab. They are one of the best banking institutions to use when traveling abroad for a variety of reasons.
Avoid Airport Currency Exchange Booths
When you arrive at the airport you will most likely see ATMs as well as currency exchange booths – like Forex and Travelex – close by. Try to avoid using these booths. They give the worst rates and sometimes even charge you a commission.
Don’t Be Too Trusting
I once was buying a subway ticket in a foreign country and watched the ticket attendant give back incorrect change to every nonlocal person in line in front of me. When my turn came around, I was short changed as well. He laughed good naturally and apologized quickly – a simple mistake, or was it?
When paying in cash, for anything, make sure you receive the correct change back. While most locals are kind, and you don’t want to assume the worst about foreigners, there are some individuals who don’t care about shortchanging unsuspecting tourists.
Credit Cards in Foreign Countries
As I touched on above, before you head out, do some research on whether the country is credit card friendly or not. Some countries will surprise you! For instance, Iceland has moved to a completely cashless society – even in small towns with less than a hundred permanent residents. While Japan, who on first look seems extremely tech advanced, barely accepts credit cards anywhere and cash remains king.
As long as your card has no foreign transaction fees, I would use it as much as possible. Not only are all your purchases are covered but cards are easily canceled if they are lost or stolen. Cash doesn’t have this advantage. Plus, if you plan to use your card more you can carry less cash around with you, which is definitely safer when traveling.
Always Pay in Local Currency
When you pay with a credit card, you may be prompted to pay with USD or the local countries currency. Always choose the later. If you pay in USD, not only will you get charged an inflated exchange rate but there is also a hidden 3-3.5% fee associated with this privilege.
This rule also applies to cash. If they accept USD, prices tend to be higher – so stick with the foreign currency.
Spend All Foreign Coins
As your vacation comes to a close focus on spending all of your foreign cash, and especially all your coins. Most exchange booths won’t exchange coins at all to a different currency, so any coins you’re left with at the end of your trip you’re stuck with. Don’t be afraid to be “that guy” paying for 8 Euros worth of food all in coins.
Getting scammed while on vacation is rare, if you know the common signs to look for. My next article will teach you all about the most common travel scams and how to avoid them.Be sure to follow on Mint and follow me on Instagram so you don’t miss an article.