If you are leaving the country this summer, there are two things you need to do in advance. First, make sure the tourist destination you are visiting is not overrated. Second, be sure to exchange currency before leaving the country. I understand that when traveling abroad, the checklist of things to do can be both long and tedious. But if you leave this task aside, your wallet will feel the brunt the moment you head to a foreign ATM.
The cheapest way to convert currencies
When it comes to currency conversion, you won’t get a better deal on an exchange than at your own bank. For instance, Bank of America does not charge its customers any fees on foreign currency exchanges over $1,000 and only charges a flat rate of $7.50 on orders below this figure. TD Bank has a similar fee of $7.50 for currency exchanges, but with a minimum order amount of $250 and a maximum order of $1,500. Investopedia cites local banks and credit unions as generally having solid rates, as well.
Some banks, like Wells Fargohave less attractive currency options, although. They don’t charge a flat fee, but instead give you a lower return on the money you trade. After entering a few numbers in their currency calculator, it looks like you can expect to pay between 4% and 10% on a currency exchange, depending on the currency. They Note that these rates change daily.
Although it’s not as good an option as the banks mentioned earlier, it’s most likely a better rate than what you pay at the airport. Condé Nast Traveler explains, “It’s no secret that airport exchanges are an expensive option for exchanging money. Most charge fees or service charges ranging from $5 to $15, and the exchange rate you get can be 7-15% lower than the standard bank rate.
If you don’t know how many currencies to convert, check the website Budget your trip to get information about the average daily cost a person spends on food, transportation and discretionary expenses in a given country. It’s a solid tool to help you start your international travel budget. Moreover, it should be noted that, strictly speaking, there is a handful of countries that will accept US money, especially vendors in tourist areas. Generally, there is considerable leeway in doing this, however, the exchange rate will therefore be much worse than if you had just converted your currency in the first place.
What to know when using your credit card abroad
If your prerogative is to completely avoid the hassle of exchanging currencies and just use your credit card when you are abroad, there are a few things you need to know. First, most banks will charge foreign transaction fees. This is usually a percentage-based commission applied to every purchase you make overseas, usually set at around 3%. If your options are either that or the flat rate of paying a currency exchange through your bank, the latter option will save you some money (assuming you spend over $250 and are able to secure a currency exchange at a fixed rate of $7.50).
Second, a handful of companies issue credit cards with no foreign transaction fees, including Hunt, Bank of Americaand Capital one. These cards are handy for frequent international travelers, though it’s always a good idea to have some hard change on you just in case.