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| Exchanging money for travels | |||
| If you’re traveling to more than one country, you will find that exchange rates fluctuate depending on where and when you happen to swap your home currency into bahts or soles or rubles. Of course, in Europe, you can use Euros everywhere. Here are a few "rules of thumb" about exchange rates. | |||
| Before you leave | |||
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On-line exchange rates – Just before you go, check out the exchange rates for your destinations on-line. This gives you a "ball-park" guide for what you should expect to get for your home currency when traveling. | ||
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ATM cards – Your ATM card can be used in cash machines in foreign countries. Your ATM card is linked to your checking or savings account at home, so be sure to deposit plenty of money in the account before your trip (you wouldn't want a negative balance while traveling). Also, check at your bank so you know what fees are associated with using your card in ATM machines abroad. For example, each time we use our ATM card in a foreign country, our bank charges us a $5.00 transaction fee. | ||
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Chip & PIN cards – In Europe, credit and debit cards all use "chip and pin" technology, which is safer than the mag stripe cards issued in the United States. You can your U.S. credit or debit card to pay bills in restaurants or hotels, but at gas stations or train ticket machines, be aware that a U.S. credit or ATM card often will not work. | ||
| On our most recent trip to Europe, we used a Travelex Cash Passport card, which you can purchase at Travelex offices, online or at most big airports. It's a pre-paid currency card, and the card can be re-loaded with money as you go. This card will work everywhere in Europe, for payment or to get cash from an ATM. | |||
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Credits cards in cash machines – These days you can also use your credit card (with a PIN number) to get cash from ATM machines abroad. It's convenient, but once again, check on the fees and interest rate for each cash advance. |
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| Getting the local currency | |||
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At the airport – The experience of money exchanges at airports is different every place you go. However, while in the past airports used to give a very unfavorable exchange rate, these days it’s usually the going rate. In any case, you’ll need the local currency and soon as you land, so use the ATM machines or bank at the airport. | ||
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Cash machines – In large cities, especially in Europe, you'll find that cash machines are very convenient. Also, look for cash machines at the train stations or air ports. However, there are limits as to how much you can withdraw each day. | ||
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Banks and money exchange offices – When you go to a money exchange office or a bank, you’ll see currencies displayed with two numbers, one slightly higher than the other, the "Buy Price" and the "Sell Price." If you want to get Euros for your U.S. dollars while in Paris, then the US Dollar "Buy" price is what you should check. If you have Euros and you’re leaving for home, the US Dollar "Sell" price is your guide. Banks and money exchange offices usually charge a commission fee (typically 3%), so check that rate also. |
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Tip: Sometimes if you are in transit from one country to the other, it isn't easy to have the local currency. But if you use dollars, for example, to pay for a taxi, don't expect the best exchange rate. |
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| Understand the Costs | |||
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Foreign transaction fees on credit cards – The bad news is that your credit card company will usually charge "foreign transaction fees" for a foreign currency billing on your card. This fee can be anywhere from 1% - 3% (e.g. 2.7% for American Express). For a large expenditure, such as a hotel bill, it can be a chunk of change. So, before you go, check your credit card policy to find out about fees, so there aren't any nasty surprises when you get your credit card bill. |
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Using credit cards at ATMS – Using your credit card at ATM machines to get cash is probably the worse option. Each time you go to the cash machine, there's likely to be the per transaction fee (anywhere from $1 - $10), plus the percentage (1% - 3%). |
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| Budgeting Tip: One friend we have always "deposits" a percentage of her traveling budget on her credit card. That way, she’s not faced by a humongous credit card bill when she gets home – and she has no worries about going over her credit card limit while traveling. |
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Instead of bringing an ATM card from our local US bank, here's the Cash Passport card we use when we travel to Europe. It's a Chip & PIN cash card that allows us to buy gas or train tickets in kiosks, without the hassle of a card being rejected. It's also is a security measure – the Chip & PIN card is much more secure. |
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Travelex Cash Passport |
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