While traveling abroad gives you tons of life experience, what it doesn’t prepare you for is the high bank charges and conversion fees. After the flights and accommodation are booked, one of the biggest concerns for travelers is ensuring they have enough of the right currency. To help you with your foreign exchange, we have compiled a list of how to get the best bang for your buck when converting money for a trip abroad.
1. Exchanging Money at your Bank
Before traveling, it’s a good idea to contact your personal bank and find out what their rate is to convert your money. Your personal bank may offer better rates, and may not charge a fee for currency exchange.
2. Never Exchange Currency at the Airport
Avoid using the currency exchangers at airports, as these counters will usually charge extremely high service fees and may not always offer the best exchange rate.
3. Withdrawing money from international ATMs
While it may seem like ATMs offer better currency exchange rates, be mindful of the fees they charge. Often ATMs charge a fee for accessing the ATM, international cash withdrawal fees, and foreign currency conversion fees.
4. Never take a cash advance on your credit card
Using your credit card to withdraw cash at a foreign ATM will result in you paying some extremely high foreign-transaction charges. In addition, the interest rate will be even higher.
5. Use credit cards for large purchases
Most credit cards charge a foreign-transaction fee of between 1% and 3% whenever you buy something abroad, but this is still the safest and often the cheapest way to make a large purchase.
6. Traveler’s Checks are a good fallback in an emergency
Carrying traveler’s checks are not only a safer option, but in many cases you can purchase them without paying a fee. They serves as a good fallback in an emergency.
7. Keep a hidden stash amidst your traveling accessories
Keeping some already converted money somewhere separate from your other travel money is a good idea should you lose your valuables or not be able to convert currency in time. Make sure this is a currency that is accepted worldwide.
8. Use your rewards to buy foreign currency
American Express Currency Exchange stores allow you to redeem your points for over 60 currencies. If you use your credit card a lot and have accumulated a large amount of points, why not convert those points into foreign currency instead.
9. Use local currency when arriving
While it is imperative to change your cash into major currencies (dollars or euros) before traveling, upon arrival you should convert some of the major currency into the local currency being used. Using dollars to pay in countries where this is not the official currency can sometimes cost you about 20 percent more.
10. Consolidate your transactions
Every currency exchange transaction has associated costs with it. Fewer transactions will mean a lower overall cost, which in turn will save money Some foreign exchange providers may even offer better rates, or waive commission fees for currency exchanges over a certain amount.