Traveling abroad offers exciting options, but for those new to international travel, understanding money exchange can seem intimidating. We have partnered with Susan Lanier-Graham, who travels around the world for her blog Wander With Wonder, to get some great tips on how to painlessly handle money exchanges when traveling abroad.
One of the questions I am most frequently asked international travel is what to do money. Here are my best money travel tips for those wandering the globe.
Notify Your Bank and Credit Cards of Your Travel Plans
Before you leave home, notify your bank and credit cards your international travel plans. To be honest, you’re probably better off to use your bank and/or credit card’s automated system to do this rather than speaking with a person. When you log into your account, there is an option to “set travel notifications.” If you do not do this, the bank will most likely decline your overseas purchases.
I always take my checking account debit card, my American Express card, and one other credit card. I may not use all of them, but I want to notify each bank in case I need the cards during my travels. Once you’ve contacted the banks, be sure to take photos of your credit cards (front and back) and email them to yourself.
Use a Credit Card Without Foreign Transaction Fees
You need to check on whether or not your credit card charges foreign transaction fees. Some, such as Citibank, can charge exorbitant fees every time you use your card. American Express and some Capital One and Chase cards do not charge fees. You should be able to find this information online, but you can always call and ask your bank.
One thing to be aware of when traveling internationally, particularly in Europe, is that most credit card readers require “chip and pin” technology. Within the past year, most US banks have started issuing cards with a chip, so this helps. If your card does not have a chip on it, call your bank and get them to issue you a new one with the chip. In Europe, customers insert the card and there is a pin attached to every card. You will be able to use your US credit card with the chip, but you will be asked to sign the credit slip, just as you do here in the US.
You can use VISA and MasterCard credit and debit cards around the world. American Express is accepted around the world, but usually only in higher end hotels and restaurants. You won’t be able to use a Discover card outside the US, so leave it at home.
During your time overseas, you are best to make purchases on your credit card instead of a debit card due to the safeguards in place with most credit cards. The one exception for using a debit card follows below …
Use the ATM to Get Cash
Don’t buy foreign currency before you leave the US. It will cost you a lot of extra money. Instead, when you land in the other country, use your debit card (which you notified the bank you would be using in the other country) to withdraw cash from an ATM machine. You will want to make certain that your debit card is on the Cirrus or PLUS network. If it is a MasterCard or Visa, it is most likely on one of the networks and will show the logo on your card.
Even though you are likely to incur a fee for using an ATM that is not part of your bank (I bank at Wells Fargo and my charge is $5), it will still be less than exchanging money at one of those exchange booths, where they charge a very high commission.
While you are best to use your credit card for purchases, you will probably not want to withdraw cash from your credit card unless it is an emergency due to the fees most banks impose on cash withdrawals. I usually hit up the ATM in the airport, after clearing customs. That way, I have local currency for taxis or public transit. If you find yourself needing to exchange cash anyway, use a local bank instead of the exchange booths.
Use Local Currency Whenever Possible
Some people ask me why they should even bother getting cash if credit cards are widely accepted. While credit cards are accepted in most countries today, you can’t use them everywhere. Local currency is best for those postcards and trinkets, when you need a bottle of water as you wander the streets of Taipei, or when you want to stop in a sidewalk café in France for a cool glass of rosé. You usually need local currency to get into smaller attractions or to pay entrance fees for temples or parks.
Enjoying a cool glass of rosé in a sidewalk café in Avignon. Photo by Susan Lanier-Graham
I have often found that if you offer up the local currency, the item costs you less than if you whip out the credit card to pay for a meal or some keepsake. If you are going to be traveling only in Europe, you can get enough Euros to last your entire trip.
If you find yourself going to multiple countries that aren’t on the Euro — for example, during my recent Danube River cruise, I was in five countries in two weeks and none of them used the same currency — just stop at the ATM and get what you think you are likely to spend during your visit. If you will be in a country for only a day, budget for meals, snacks, and whatever keepsakes you might want. You probably will not be able to use the money in the next country and you always lose something each time you convert between currencies.
On my river trip, for example, I had five hours in Belgrade. I wanted lunch and a few postcards, so I purchased the equivalent of $20 in local currency. I ended up with less than $2 worth of local currency at the end of the day, making for a great keepsake to bring home.
What places that say they will take US dollars? You are usually better off to still get local currency and pay in cash. On my recent trip to Budapest, I heard a woman ask if she could pay for her purchases in US dollars. The clerk was more than happy to take her dollars — and quoted her a price of $45 for two bottles of water, two glasses of lemonade and a sandwich. She obviously declined and paid for her purchase in Forints, which came to the equivalent of $5.
Take Time to Understand the Local Currency
Everyone who has ever traveled to another country has, at one time or another, been in the spot where you look at the pile of coins or bills in your hand and can’t even begin to distinguish one from the other. That can lead to losing money.
To prevent that from happening, find a quiet spot to examine your new currency. Obviously, you don’t want to pull your money out in the middle of a crowded room, but I usually do this in a restroom or even once I’m in my hotel room. You have real money. It’s not Monopoly money. No matter the currency, whether it is Zambian Kwacha or British Pounds, it is all divided into units just as our dollars are. In Britain, there are 100 pence (or pennies) in every Pound. In Europe, there are 100 cents in every Euro. Just as there are 100 cents in every dollar.
Look at the exchange rate the day before you arrive. Don’t obsess using a currency converter. You can get close enough. With some things it is easy. For example, if every Euro is worth $1.10 US, and something is priced at 10€, you know it’s $11. If it’s 5€, you can think $5 and be close (okay, so it’s actually $5.52, but you see that it is close enough for your conversion purposes). Even for the more difficult currencies, you can get a baseline before you go out. For example, there are 286 Hungarian Forints to $1 US. So, logically, think in terms of 300. When I saw something priced at 900 Forints in Budapest, I knew it was $3. If you get an idea of the exchange rate before you venture out, you can blend in much better as you explore.
Spend the Remaining Cash at the Airport
As I mentioned above, it usually costs you more to convert money back into dollars. Every time you exchange, you lose a little bit. Unless you end up with more than $40 worth of local currency, you’re better to spend it when you get to the airport. That bottle of water, snack or magazine can easily be purchased with the credit card, but if you use up the last bit of your yen, it’s even better.
Of course, I do always stash a bit of cash to take home as a souvenir. I personally love my stash of bills that remind me of my travels. It’s fun to see a bill with 50,000 on it. By the way, that blue 50,000 bank note in the photo above is an Indonesian Rupiah worth $4.
Keep a Few Dollars for Emergencies
We have all heard the horror stories of purses and wallets stolen on a trip, leaving the traveler with no money or credit cards. In addition to being cautious and keeping my bag across my body, never putting a wallet in a hip pocket, and never pulling out tons of cash in public, I also carry a backup.
I always keep one credit card tucked in my carry-on bag and usually lock it up in the hotel safe in case of emergency. I also usually tuck a crisp one hundred dollar bill in my carry-on and keep it hidden at the hotel as well. No, I don’t want to have to pay the high price to convert cash to local currency, but if there’s an emergency, I know I always can. There are some countries where creased and torn US bills are not accepted, so make certain it is a neat new bill.
With just a few easy tips and safeguards, you will not only have a fun international experience, but you’ll be shopping like a local before you know it.
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