Whether you’re a globetrotter or this is your first time traveling abroad, I’ve got some currency exchange tips for you. I’m a US citizen but have lived overseas and traveled overseas as an adult for 20+ years. These are some of my favorite tips that will save you from unnecessary fees and higher exchange rates.
First, before doing anything, you need to know the exchange rate. You can check out the current rates at exchangerates.org. Then I recommend downloading a currency exchange rate app. My Currency Converter & Rates is my favorite - only for Apple users though. If you’re team Android, My Currency Converter is a comparable app. Both apps are free.
Knowing the exchange rate and how much it will cost to convert your money will make it easier to budget for your trip. It will also help you know if you’re getting a good rate or not if you’re using a currency exchange service.
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Exchange Currency at Your Bank
If you want to go with some local currency in your pocket (figuratively speaking, not literally - don’t keep it in your pocket), then there are a few ways to acquire currency while still at home in the U.S. If you’re in Seattle, San Francisco, New York, or places that have larger international populations or are close to borders, you’re more likely able to find a local bank that can exchange your dollars for whatever currency you’ll need. Especially currency for the more common destinations like Canada, the UK, and Europe, or Mexico if you’re in the Southwest.
If you decide to exchange currency at a bank before you leave on your trip, ask them if they will exchange the currency when you return. If not, you can exchange the currency at an airport exchange booth, but you will most likely not get the best rate. Some people prefer to do that so they’re not coming home with currency they can’t use.
If you feel uneasy traveling without the local currency, or if you’re worried that your credit or debit card won’t work or will be declined while you’re abroad, then definitely try to exchange some currency before you leave. Overall though, you’ll want to get the best exchange rate and here’s what I’ve found works the best.
Use Local ATM
When I’m traveling I prefer to use local Automatic Teller Machines (ATM). When I lived in Germany several years ago, I found that I got better exchange rates going to the ATM in the country I was visiting rather than going to my bank beforehand. The fees were minimal when using an ATM, but the bank sometimes charged up to 6% in exchange fees. Whereas the ATM would only charge a few US dollars for using an ATM that was out of network. The downside to using ATMs is that you're limited to the amount you can withdraw daily (usually around $200 or equivalent - although there are some exceptions).
It’s also important to know that Airport ATMs and currency exchange booths or kiosks in the airport will usually have a much higher exchange rate than other options. Hotel ATMs will as well. Even though the exchange rate may be good, there are usually additional fees added to the hotel ATM. So read the signs. If there are additional fees, it should be posted or at least on the ATM screen.
Be sure that you’re using your bank’s debit card when using the ATM. If you use your credit card, that will be considered a “cash advance” and will have higher fees than just a bank withdrawal. You would then have “cash advance” fees, foreign transaction fees, and possibly an ATM fee.
No International Transaction Fees
Using a credit card abroad is definitely easier now than when I first started traveling. With wifi and bank apps, using your card is easier than ever (and can be safer when traveling too). Before you travel, you’ll want to call you credit card issuer and see which cards have the lowest international transaction fees. Or better yet, no international transaction fees at all. Leave your other cards in a safe place at home.
You’ll also want to tell your credit card company what dates you’ll be traveling. They’ll make a note on your account so you don’t get flagged for fraudulent activity. Trust me, this can be extremely inconvenient when traveling.
Be aware that if you pay with a credit card, some merchants may ask if you want to pay in U.S. dollars or the local currency. If this happens, always choose the local currency. The merchant can choose whatever exchange rate they want to convert your U.S. dollars to their currency. However, if you choose to pay in the local currency, your credit card issuer will determine the exchange rate. Chances are, your credit card’s rate will be a much better deal.
How Much Cash to Carry
Depending on where I’m traveling, I usually carry about $100 - $200 in local cash for small purchases or incidentals. Anything over about $20 I just put on my credit card. (Which of course I pay off when I return from my travels.)
Here's a travel tip that will save you money. Before you leave for your trip, make sure your Uber and Lyft accounts have been updated with your credit card that doesn’t have international transaction fees.
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I hope these tips are helpful. If you have additional tips for exchanging your foreign currency, then leave a comment below. I’d love to hear what you do to get good exchange rates.