Whether for business or pleasure, traveling abroad is always a fun and exciting time. When you travel to a foreign country, you have to consider the currency exchange. The exchange rate is when one country’s currency is priced in another country’s currency. The exchange rate helps travelers purchase goods and services in other countries. The value of the dollar can often be perplexing when traveling abroad, especially when it comes to exchange fees and how the dollar converts to other foreign currencies. Below are a number of tips for exchanging currency when you travel:
1. Using your debit card at a foreign ATM machine can be quite expensive. As well, not all ATMs will be compatible with your card. There also tends to be high foreign-transaction fees so you should avoid using your debit card when traveling abroad. Traveler’s Checks are a good emergency alternative. Try to purchase traveler’s checks where you do not have to pay a fee. For instance, American Express checks can be cashed at an Amex office in another country.
2. Using a credit card or debit card at an International ATM in another country is a good choice. They tend to be one of the cheaper methods of exchanging money. You will however be charged foreign-transaction fees. If your bank has international ATMs, you will likely save a bit of money on the fees for your cash withdrawals. Before you travel, you should check with your bank to see if they have international ATMs or international bank partners. The costs of withdrawing from a foreign bank not associated with your bank can be quite high.
3. You can use your credit card when you make an expensive purchase. Most credit cards charge a foreign-transaction fee that can range from 1% to 3% when you make a purchase in another country. Check with your credit card to fins out their foreign transaction fees before you use the card. It is a cheap and safe way to make a purchase and will get the best possible rate.
Some banks do not charge anything extra for foreign purchases beyond the 1% that Visa and MasterCard charge. As well, some credit unions have low fees. The only major disadvantage, of using credit cards is if they are lost or stolen, there is the potential for misuse which could cost you a lot of money.
4. If you are considering using an exchange bureau, it is important to be aware that they normally charge very high exchange rate fees and high commissions. It is better to use a local bank to do your exchange. One disadvantage of carrying traveler’s checks is that often you have to convert them to cash at an exchange bureau which may not be available in all places.
When planning an international travel trip, you have to consider how you will pay for products and services. It is important that you do your research before you leave. Knowing where and how you will make your currency exchange will help make your travel abroad experience easier, cheaper, and more enjoyable.