Are you planning to go abroad soon? You’ll need to have access to foreign currency. While you could make all your purchases with a credit or debit card, you run the risk of wasting too much money on foreign fees. One way to avoid that is to exchange currency and carry around cash. But sometimes getting access to foreign funds can be expensive.
Banks and credit unions are generally the best places to exchange currency, with reasonable exchange rates and the lowest fees. If you’re on a mission to save money, here are the cheapest ways to purchase.
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If you haven’t packed your bags, you may have the time to get the best currency exchange rates before you leave. Many banks, including the large institutions listed below, offer currency exchange to their customers. Though there may be a small fee, your bank or credit union will almost always be the best place to exchange currency (and the cheapest). You may be able to order currency at a branch location or by phone or online to pickup at a branch.
You can also order through an online currency converter, which will have the cash delivered to your home. But exchange rates are less favorable, and the delivery charges will eat into your funds. And airport kiosks or stores should be a last resort. Exchange rates are poor, and fees are high.
Where to Get Foreign Currency Abroad
If you can’t exchange currency ahead of time, no need to worry. You’ll have plenty of opportunities once you reach your destination. It just might be a little harder to find a good deal. Again, steer clear of major transportation hubs, your hotel or stores in tourist centers.
Once you’re abroad, you’ll have most success accessing your bank’s ATM network with your debit card. Check whether your financial institution has a partnership with any overseas banks. That way, you can withdraw cash from their ATMs without paying a fee. You can still access your bank’s funds without that kind of partnership, you’ll just face foreign transaction fees and surcharges from both your bank and the ATM owner. Foreign transactions fees usually total 1% – 3% of the transaction amount. In this case, it’s a good idea to take out as much money as you’re comfortable carrying at one time. This allows you to avoid multiple withdrawal fees.
What to Do With Foreign Currency After Your Trip
After your trip, chances are you’ll probably end up with a bit of foreign currency leftover. There’s no need to feel shortchanged, though. You can easily go back to your local bank, credit union, post office or currency exchange counter after you return. Keep in mind that many of these places don’t accept coins, so try to spend those first and save the bills for later.
If you travel frequently, you could just hold onto that foreign currency for your next trip. Of course exchange rates may not stay consistent throughout your many travels. This strategy could help you get ahead, but you could also take a hit. It works best when you have less than $50 in another currency that you’ll likely use again.
So you don’t want to make a trip to the bank but don’t want your foreign currency collecting dust, either? Try selling it to friends who plan to travel to the same destination you just visited. You can use the current interbank rate or the rate that you paid for it, saving you both money either way. You can also sell foreign currency on eBay. Just be sure to pay attention to the ground rules.
Using a No Foreign Transaction Fee Credit Card
The most efficient way to use foreign currency without having to exchange your money is to use a credit card that doesn’t charge you a foreign transaction fee.
Visa and MasterCard are the most widely accepted. American Express works at major retailers but rarer at smaller merchant. Discover on the other hand is mostly unheard of and not used often.
Exchanging Currency At the Airport
The worst possible way because the exchange rates are the worst. But if you find yourself in a jam and need a little cash, it’s not completely unreasonable to turn to one of these.
Travelex is a popular airport currency exchanger. If your airport has international flights, chances are it’ll have of these guys too.
Using Traveler’s Checks
Another way to exchange currency is to purchase traveler’s checks. You may be able to buy them from your bank or credit union, but you’ll likely have to pay a small fee. Again, going into the bank and buying them from a teller is a good idea if you don’t want to pay extra to have them mailed to you.
If you can’t get traveler’s checks from your own bank, there may be another bank in your vicinity that sells them. Many traveler’s checks come from American Express. If you visit its website, you can enter your address and get a list of the closest banks that provide traveler’s checks. But the fee you’re required to pay may be higher if you don’t have an account with the bank.
The good thing about traveler’s checks is that you can easily order additional checks if you lose them or someone steals them. Plus, once you have them, you’re the only person who can trade those checks in for foreign currency. The downside is that not all businesses let you use them to make purchases. So you’ll probably have to find a bank once you get to your destination that’ll let you cash them in.
Bottom Line
In conclusion your bank or credit union is almost always the best place to exchange currency. Make sure that before your trip, you exchange money at your bank or credit union Once you’re abroad, use your financial institution’s ATMs, if possible. After you’re home, see if your bank or credit union will buy back the foreign currency.
For more posts like this, check out our list of Bank guides to help you out!
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