Converting Cash And Using Cards
Plastic money is now one of life’s major conveniences but when traveling internationally there are a number of things to look for and do to prevent getting ripped off.
Using Credit Cards
Is Your Card Travel Friendly? – Before you travel check your credit card institutions policies on foreign currency conversion and what fees apply. A number of credit cards do not charge a foreign currency transaction fee and convert transactions at the current daily rate. If yours charges this fee you need to get another card for travel. Some of the better choices include:
- Bank of America® Travel Rewards Card
- Capital One Quicksilver Cash Rewards Credit Card*
- Discover it Miles Cards
- Capital One VentureOne Rewards Card
- U.S. Bank Altitude Go Visa Signature Card
- Bank of America Premium Rewards Card
*Capital One offers a whole range of cards without foreign currency conversion fees.
Carry A Tap Card – Next check with your bank if your card is a “Tap” transaction activated card and if not ask if you can add this feature. American banks seem to be always behind much of the rest of the worlds card features and in some areas tapping (both cards and phones) is the only transaction method..
Don’t Convert To Dollars – Often when traveling internationally and using your credit cards a merchant or restaurant will ask if you want the transaction converted to dollars (or Euros). It seems like a simple request and seeing your receipt stated in Dollars or Euros might seem useful. Just say no or you may get hit with a really high local conversion rate.
Try And Carry Some Cash – Traveling today you will rarely run into situations where your credit card isn’t accepted. A few situations like buses and taxis may require cash so it’s always advisable to be prepared with some small amount of local currency.
Is Your Debit Card Travel Friendly? – Debit cards can be an issue because of the pin number requirement. If you usually prefer using a debit card, before you travel, talk to your bank or credit union. Tell the representative that you plan to use your debit card traveling abroad and ask if your Personal Information Number (PIN) will work overseas. Four-digit PINs work in most countries but if your PIN contains zeroes, it may not work in non-network ATMs.
Using Automated Transaction Machines (ATMs)
Be Cautious At Airports – Debit cards have some real advantages for managing cash while traveling internationally. First, in most cases, the cost of converting currency is usually better at an ATM than the currency exchange at Airport Kiosks or those Foreign Exchange windows. Although exchanging currency at the airport may seem convenient, it is usually best to avoid this. Those really convenient outlets usually charge outrageously high exchange rates along with transaction fees. Second, with a debit card, if you plan right, you can get conversions only as needed as opposed to carrying a lot of different currencies.
All ATMs Are Not The Same – Like credit cards, debit card fees can vary. Before you go traveling internationally check the fees with your bank and find out the preferred ATM networks to look for. If you do much overseas travel you might consider getting a specific debit card just for foreign travel. In that case it is also a good idea to connect it to an account with a lower balance intended just for travel. While rare, there are stories of people that have lost large amounts that their bank is not responsible for.
Our favorite debit card is the Schwab Bank High Yield Investor Checking Account – more information HERE. When you open a bank account with them, you’ll receive a Schwab Bank Visa Platinum debit card. With this card you don’t have to worry about any foreign exchange transaction fees when you use it as they’re reimbursed by Schwab.
Transaction fees and exchange rates are big profit opportunities for many banking institutions so you need to be cautious. Avoid “independent” ATMs with one of the biggest offenders being Euronet in Europe. Their machines are marked EUR along with a country code – in Hungary they’re EUR HUF. They charge very high fees with terrible exchange rates.
In addition do not allow your ATM transaction to be converted to US dollars in the transaction as additional conversion rates can be added on top.
Our recommendation is to find an ATM outside a local bank displaying the banks name. Again be careful as those “independent” ATMs will often locate their machines near local bank ATMs and often those machines boast “Free Cash Withdrawals” – usually not true. Other ATMs to avoid include Cardpoint, Moneybox, and Cashzone.
Before anything stay informed about current exchange rates. There are a number of popular currency converter apps for your phone that provide the latest exchange rates quickly and easily. Most converter apps feature exchange rates for hundreds of countries. They will also allow you to setup your personal currency list to allow you to check at a glance, even offline. Be sure to use the built in calculator to verify all transactions.
Converting Cash For Travel
Exchanging cash for travel is another option, especially if you don’t use credit or debit cards. Before you leave check with your bank about buying foreign currency. If you’re going to get a good exchange rate and low fees this is usually the place to go. It’s also very convenient to have cash to tip taxi drivers or skycaps at the arriving airport or buy a coffee or lunch without looking for an outlet to exchange money. Some banks such as Citibank and Bank of America may not charge a fee and will provide options such as doing the transaction online and mailing you the currency.
While traveling another good option is to look for a Western Union outlet, they usually offer better rates and lower fees than most currency exchange outlets. Baring that, go to local banks to exchange your money but unfortunately local banks are becoming reluctant to do the exchange if you aren’t a customer.