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Use these tips to help you get the best exchange rate while traveling and make your money go further when abroad.
Getting a fair rate for your money isn’t too complicated if you know where to look and what red flags to ignore. With some planning and smart thinking, you can save yourself tens, maybe even hundreds, of dollars, both before and during your trip.
Know the Currency Exchange Rate
Look up the exchange rate before you leave the country. Being informed is the first step in getting a good rate. It will prevent you from exchanging the money at a very unfavorable rate.
So, find this information before you set off on your trip and check the rate occasionally to stay informed about any major changes.
Our favorite currency app for checking the exchange rate is XE Currency. You can look up the live currency exchange rates on the app.
When you check the rates, the app actually saves the rates so that you can access this information offline. Even if you don’t have internet access, you can still have a good idea of the exchange rate based on the last saved rates.
Use a Credit Card with No Foreign Transaction Fees
If you have a credit card with no foreign transaction fees, use it whenever possible. If you don’t have one, you should look into getting one if you travel quite a bit. In the U.S., there are many such options.
Before paying by credit card, though, take into account a few factors and see if they apply to your situation:
- Local shops and restaurants may add a fee for transactions made with credit cards.
- Some credit card companies charge fees for transactions made in foreign currencies. That’s true especially if you’re based outside of the U.S.
Use a Debit Card with Low or No Foreign Transaction Fees and No ATM Fees
When using your debit card to withdraw money from ATMs, you may have to pay additional fees, including the following:
- a currency exchange fee,
- a fee from the local bank’s ATM, and
- a fee from your bank back home for using an ATM abroad.
In the U.S., UK, and many countries in mainland Europe, you can generally find some debit cards that waive most or all of these fees. If you travel quite a bit, you can save hundreds of dollars in ATM fees annually using no-fee debit cards.
Regardless of the card, always stay informed on what you’ll get charged abroad. Go over your bank agreement and make sure you know exactly how much you get charged on foreign transactions. The goal is to find the best deal possible, but you have to do this before you set out on your trip.
If you can’t avoid the ATM fees, keep in mind the ATM fees are often set per transaction so you can save money by making a larger withdrawal rather than multiple smaller ones.
Another tip to remember is that some ATMs will offer to do the conversion for you. That means they will charge your card in your home currency (for example, USD if you’re from the United States or GBP if you’re from the United Kingdom) instead of the local currency.
The first time I encountered this was in Porto, Portugal. Letting the ATM charge me in US dollars rather than euros would have meant losing about $20 on a $200 withdrawal. As you can see, that’s an atrocious charge. Please do not fall for it.
Pay for Purchases in the Local Currency
Along those same lines, many merchants now offer to charge your card not in the local currency but in your home currency. A lot of tourists fall into this trap. Don’t agree to this offer, as they often add fees to the already poor exchange rate.
At the pay terminal, pay for the purchase in the local currency and allow your credit card company to convert at a better exchange rate.
Avoid Airport Exchange Rate Kiosks
You’ve probably already seen many money exchange kiosks at airports. They may promise “zero commission,” but in return, they have a poor exchange rate. Even though their airport location is convenient, you pay a very high price for this ‘convenience’ – a price that can be as high as 15%.
Although airport exchange rate kiosks are a terrible option, there are occasionally legitimate exchange rate kiosks that offer good rates once you’re at your destination. For example, in Moldova, Eastern Europe, there is practically an exchange kiosk at every corner that offers a very good exchange rate.
If you have USD, you can sometimes get better rates at the local exchange kiosk (not the airport exchange kiosk) than by withdrawing money from the ATM.
These are just a few tips for how to get the best exchange rates when traveling. Good luck, and remember to take your time. Don’t rush to get your money just because you want it done.
Spending a little time getting the right cards or exchanging at the right place can save you tens, even hundreds of dollars.
- Know the Currency Exchange Rate
- Use a Credit Card with No Foreign Transaction Fees
- Use a Debit Card with Low or No Foreign Transaction Fees and No ATM Fees
- Pay for Purchases in the Local Currency
- Avoid Airport Exchange Rate Kiosks
Save and Pin for Later
Traveling internationally soon? Save this article to one of your trip planning boards so that you can revisit these top tips when you want to exchange money.