Currency exchange is usually unavoidable when you’re traveling to a different country. Because there are so many countries that don’t accept the United States Dollar, and many vendors and retailers only accept cash, you’ll need to exchange money. Depending on how much you plan on spending, where you’re going, and how long you’ll be traveling for, currency exchange can be a travel expense that adds up quickly. The following tips can help to lower this cost:
Find out what currency is accepted
Don’t just automatically assume that a country won’t accept the United States Dollar, even if they use their own currency. Find out before your travels, and you may be able to avoid exchanging money entirely. But if you do end up using American currency, be careful, because some vendors may inflate the price of their merchandise when they accept United States Dollars. It helps to learn more about the currency of the country you’re traveling to and to compare the value against the United States Dollar. This way, if you see a price listed one way, but you’re quoted something else in United States Dollars, you can know just how much you’re paying and if you’re being overcharged.
Free apps like XE Currency and GlobeConvert can help provide some insight on current exchange rates, so you’ll know if a specific currency exchange service is offering a good deal or if they’re overcharging. If you are unfamiliar with the exchange rates, it can be easy to pay top dollar without even realizing it.
Withdraw money from the ATM
Sometimes, the easiest (and most inexpensive) way to exchange your money is to just use your debit card and withdraw it from a local ATM. Before you leave for your trip, contact your bank to find out how much they charge for international ATM transactions. Some will charge a flat fee or a percentage of what you withdraw, and other banks may waive this fee completely. If your bank does charge for international ATM withdrawals, compare their fees to the rates from various currency exchange companies to determine if you’re better off just exchanging money or withdrawing from the ATM. If it turns out that withdrawing from the ATM will help you to save more, but your bank does impose a fee, try to withdraw enough money so you won’t have to do it again during your travels.
Don’t exchange money at the airport
A lot of travelers make the mistake of exchanging their money as soon as they got off the plane. After all, exchanging money in the airport is pretty convenient, but you will pay a premium for that convenience. Plan ahead so that you won’t need to exchange money at the airport. If you’ll need cash for a taxi to get to your hotel, for example, find an ATM in the airport or exchange some cash before you leave. Airport kiosks may advertise that they don’t charge additional fees for money exchange transactions, but be wary of this. Some may not charge a fee, but as a result, the exchange rate is often worse and you’ll receive less for your money.
Use a debit or credit card
Before you leave, find a credit card that doesn’t implement foreign-exchange fees, if you don’t have one already. If you don’t have any credit cards and you want to avoid applying for one, you may want to use your debit card. If you do use your debit card, make sure that the charges are made in the country’s currency, and not in US dollars. Otherwise, the conversion rate could end up costing you more in the end.
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Nothing above is meant to provide financial, legal, or tax advice. You should meet with appropriate professionals for such services.