What is the best way to convert cash when you travel? Ask a dozen people that question and you can
expect almost as many answers. Since we
were recently asked this question, I thought it was time for us to offer our
thoughts on the subject. Caveat:
currency conversion in Cuba is different – and it may be changing. Get an update on Cuba before you go…
You need to answer one question before you make cash conversion
plans. Do you want “easy” or do you want to lower your conversion cost? If you live on the “easy” side of the question,
then we have a quick answer: before you leave on your trip, call your bank. Many banks will offer currency exchange, for
a fee. Reach out to your bank and ask if
they can exchange dollars for whatever currency you need. Once you have arrived at your destination,
visit a local ATM if you need more cash.
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| Cash from an ATM in Budapest |
Last year, we converted $400 to Euro with Chase bank and the
fee was reasonable – we wanted easy: we wanted convenience and most of the
countries we visited accepted the Euro. However,
we still needed to have local currency in two countries on our trip. We had Euros, but needed local currency in
Croatia and Gibraltar. In these
countries, we withdrew cash from an ATM.
More about ATMs later in this article.
One exchange point we avoid: currency conversion booths at the
airport. Doesn’t matter if it’s the last airport in the US or at your
destination, avoid exchanging money at a booth.
The exchange rate is usually worse than from banks and ATMs; they charge
a substantial fee -- cost more and you get less. However, it’s always best to have some local money
in your pocket when you arrive (catch 22). You may need to pay for a taxi or a
snack before you get to your hotel. Many
hotels can exchange currency at the front desk. The exchange rate at a hotel can
vary by hotel and country. It works if
you need to convert a few dollars, but not a place to make a major cash exchange.
We try to avoid changing dollars in a local bank. Many local banks will need to verify your
identity (request your passport) and require you to sign their exchange documents.
Same rule of thumb for money changers in
a storefront in the city. In some
countries, there is an active black market for dollars, but this is illegal and
carries one big risk, can you tell the difference between a counterfeit bill
and a real one?
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| Cash from an ATM in Indonesia |
If you travel with a Debit Card, you can get local currency
from most ATMs. Here, you will get a good exchange rate, but may be charged
fees by the ATM provider and/or your bank. Before you travel, it’s a good idea to check
if you bank has foreign partners on their network. If so, you can get cash from
a “networked” ATM with no (or low) fees and get the bank’s exchange rate. This is the best exchange rate you will find
on your trip. However, do you really
want to be looking for an ATM at six in the morning after an international
flight?
Credit cards? The
next article will be about using credit cards when you travel.
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