One of the questions that we get all the time is how to avoid overspending on fees and exchange rates while traveling. Although the best strategy differs depending on your destination, here are some tips to keep in mind no matter where you’re going.
Know the current rate before you go so you’ll know when you are getting a good deal, and so you can better estimate your overall expenses. Accept that you will have to pay a little extra to use foreign currency and factor that into your budget.
Avoid exchange agencies. Exchange agencies are not your friend—their rates will be lower than your bank and they will also charge commission fees. Some agencies will advertise as “commission free,” but that often means that their rates are not as high (and you won’t be getting your money’s worth). Make sure you know a good rate when you see one and do the math for yourself. Hotels, airports and train stations also tend to have lower exchange rates.
Use credit cards when you can. Find out what the foreign exchange fees are for you credit card before you go. Most companies charge around 3%, but some cards won’t charge any fees, so it may be worth your while to try a new card if you travel often. Keep in mind that American Express and Discover are not as widely accepted overseas as they are in the U.S.
Your ATM card will work much like it does at home, so beware of fees associated with using a different bank’s ATM. On the other hand, your bank may have an alliance with other world banks and offer fee-free withdrawals at certain locations.
Call your bank to tell them where you’ll be and how long—one phone call before you go can save many headaches trying to get in touch while you’re overseas. Keep your bank’s contact info on hand just in case.
Beware of dynamic currency conversion fees, a charge you could incur by having a payment converted to U.S. dollars during a transaction. If you are asked “Would you like to be charged in dollars or euros?” always opt for local currency.
Do you have any tips or tricks for exchanging money? Tell us in the comments!