Best places to exchange currency and save on fees
There is nothing quite like coming home from a good trip abroad thinking you were smart to stay on budget only to be hit by unexpected foreign exchange charges on your bank statement and credit card bill. .
For this reason, travelers should look to convert their currency before embarking on a trip. It helps if you have an idea of what a fair is exchange rate is, then check key business websites first. Here are some of the best and cheapest places to convert currency:
- Local banks and credit unions usually offer the best rates.
- Large banks, such as Chase or Bank of America, offer the added benefit of having ATMs abroad.
- Online bureaus or currency converters, such as Travelex, provide convenient currency exchange services.
Ordering cash online will likely include a delivery charge and the exchange rate will not be as good as with your bank; however, this is still a better option compared to the options to avoid below.
Key points to remember
- Due to the high currency exchange fees, travelers should consider converting their currency before traveling.
- Banks, credit unions, online bureaus, and currency converters offer convenient and often inexpensive currency conversion services.
- Once on foreign soil, the best way to convert currency is to use a foreign ATM or identify if your bank has ATMs or bank branches nearby.
- Many credit and debit card issuers allow users to purchase without transaction fees from abroad.
Foreign currency exchange
Almost all overseas travelers need to exchange currency at some point in their trip. If you don’t know the tricks, it can be extremely expensive. Currency exchange at the hotel or even a currency kiosk in the country can be expensive, which includes poor exchange rates and high fees.
The best option for exchanging currencies and saving fees is to use a foreign ATM.
Based on the suggestion above, if you don’t have time or don’t want to carry a lot of cash, check if your bank has ATMs in the destination country. They may even be bank branches. A key tip is to use an ATM in the airport as soon as you arrive.
Upon returning to the United States, head to your bank or credit union to transfer the remaining foreign currency to U.S. dollars. It is important to note that some banks will not accept foreign currency. As a last resort, if you have any foreign currency left before your departure, look to convert it at an airport kiosk or store before you leave the country.
Use of credit versus cash for foreign transactions
The world has become so digital that most people no longer walk around foreign countries with traveler’s checks and wallet belts. That is why you should take with you a debit card with no foreign transaction fees and a credit card with no foreign transaction fees. Companies like Chase, Bank of American, Capital One, and other major credit card issuers offer specific cards with no foreign transaction fees.
Also, it is best to primarily use a credit card with no transaction fees as it will likely offer fraud protection; use the currency only as a backup. You can replace lost or stolen credit cards, but lost cash can never be replaced. However, do not use your credit card for a cash advance to receive foreign currency. This means that you will be hit with cash advance fees and a high interest rate that starts accruing immediately.
The widespread use and improvement of technology has helped make the use of credit and debit cards possible in most parts of the world, although there are exceptions, so it is worth checking out. whether or not your destination accepts debit cards or specific cards before you travel.
Other travel tips
One thing to do before traveling abroad is to let your bank and credit card companies know about your travel plans. That way, if you use your credit or debit card overseas, these companies won’t cut you off from your account due to fraud issues.
Also, avoid paying in US dollars when possible, even if a merchant offers to convert them for you. This includes payment by credit or debit card. The trader would likely convert at a rate that is disadvantageous to you and charge a fee. The same is true for payments in US dollars in the form of cash.
The worst places to exchange currency
Some places you should avoid for currency exchange are:
- Airport kiosks and stores when traveling to a country (not to be confused with airport ATMs): Plan ahead as airport kiosks typically charge some of the highest fees and have the worst exchange rates. When returning to the United States, this might be the only option.
- Travelers checks and prepaid debit cards: These are not efficient and often carry various transaction fees. In addition, they offer few advantages, in terms of security, compared to cash. In addition, prepaid debit cards have card fees, overseas transaction fees, and ATM usage fees.
The bottom line
If you do a little homework before you go on your trip by checking the exchange rates, you’ll save a pretty dime.