When traveling to a foreign country, unless you have stacks of foreign cash, you probably need to figure out the easiest way to exchange money for your destination country. Making stops in multiple countries may also add an element of complication to the picture. Following some of these tips may help to save you time and more importantly money when traveling.
No Fee Scheme
While the no fee offers that may be advertised by some of the larger exchange services like Travelex look great, they may need closer inspection. It is true that they do not charge you a fee, but they typically have considerable markup in the exchange rate versus what you would get a bank or the regular market rate. Make sure to check another source like Google to see how much of a markup you are paying. There will be a markup wherever you go, so the actual exchange rate is just so you know how much money you are paying for the exchanges services.
Free to use ATMs
At every major transportation hub overseas there is typically a fee-free ATM that hands out cash in the local currency. This is going to be your best bet on exchanging the bulk of your money. The free to use is just on the ATM’s side so you also need to check with your bank on how they handle foreign ATM transactions. Many banks may charge a hefty fee. It might also be a good idea to open an account with a no-fee bank and put your trip money in that account. This provides two benefits, first you will have access to your money in the low to no fee account, and second you if something happens to your card you will not have lost your day to day checking account information.
Amount of Money to Exchange
I typically like to have about $100 dollars of money exchanged into my destination currency prior to leaving. This will typically cover a meal and public transportation for two people to get to our hotel where we can sort out any unforeseen financial issues. Much more than that and you open yourself up to loosing it and not being able to get it back. Plan out your hotel, transportation, and food as much as you can before hand. Make sure you know what places may only accept cash, and have that amount pulled out. Many banks may have a max on your daily withdraw amount and you want to make sure you have access to your hard earned travel money.
Timing the Exchange
Unless you are a professional currency trader, the daily ebb and flow of the markets will not have much effect on your exchange, especially if you are only doing about $100 dollars. I like the Travelex service only because they are typically conveniently located at airports that I will be at prior to departure. In order to make sure that they have your money available and ready to go it is a good idea to reserve and pay for your money online before you go. Depending on your pick up location they may have a different number of days until the money is available, so make sure to check their website.
If you are making stops in multiple countries you can take advantage of the local exchange services in places like the departure train station or airport. They will typically have a high markup or fee, so only exchange enough to get you into the city where rates go down considerably, or you can get to a fee-free ATM. Another option is to have exchanged amounts available in all the currencies you will need, but this brings more risks that you may loose the money during your travels.
Having a credit card for your travels is a great tool in terms of exchanging money. Many cards offer a free foreign transaction service, so you will just have to pay the exchange rate at the time of your purchase. This is by far the most convenient method of exchanging money. You just have to do your homework and make sure the vital places like hotels, and travel between locations will accept your credit card. If you use a card that gives you travel benefits you can start working on your next trip while enjoying your current trip. Many credit cards also allow you to pull money from an ATM with a pin number set up. Be careful with this feature as it usually comes out as a cash advance which can have a very high interest rate.