the not-so-weary traveler: currency exchange tips

As you're making summer vacation plans, remember a key logistic: currency. Check out the tips below on the most efficient ways to get the most bang (or pound or euro or yen) for your dollar. (Also, recall our post on a handy currency exchange calculator here.)

• Pre-pay for big expenses like hotel, flight, etc. as early as you can if you know your currency is trending toward loss of value. That way, you don't lose as much money with the lowering exchange rate.
• Convenience isn't everything! Many currency exchange booths in prime locations (e.g. airports, hotels, tourist hot spots, subway stations, etc.) use the lowest possible exchange rate, plus charge a high commission.
• Beware of bank fees. Exchanging currency with your local bank can be expensive, as they tend to change fairly large fees. Be sure to call and check first before you go this route. However, the good thing about this option is that it's safe, easy, and you tend to get a good rate of exchange.
• Beware of fraud. Always exchange with a reputable source. Online currency exchange systems are particularly suspect. Bottomline: better safe than sorry!
• Credit cards tend to be a good way to go while traveling abroad, as they typically offer the best/truest exchange rates. However, before you leave the country, be sure to call your credit card company and double check all of their policies on international transactions to ensure against any hidden fees. Also, when you use a credit card abroad, many establishments will charge you a premium themselves outside of the credit card company. So be aware!
• ATMs are actually pretty decent while traveling abroad, as long as you use them sparingly (i.e. withdraw a large enough amount that'll last you for a few days and keep it safe). Typically, your bank will charge you a transaction fee per withdrawal AND the ATM will charge you a fee, but the upside is that you'll get a good/true exchange rate.
• Only withdraw as much as you need. Remember, once you return to your home country, you'll have to re-exchange whatever foreign currency you have, losing even more per dollar in the whole process.
• If possible, check the exchange rates yourself daily and keep a record on hand. That way, you'll know how to size up an exchange rate when you come across one. You'll also be more aware of the general trend of your currency. Perhaps it's better to hold out a day before you exchange if your currency is going up, or vice versa.

Technorati tags: currency exchange, exchange rates, travel

Photo credit: Marcus Jump (stock.xchng)

Comments

[Wendy G]

Sarah,

Some great tips there, thanks for that.
One thing I'd like to add to that is to consider a pre-paid credit or debit card in the currency of the country that you are visiting. If you do that then you'll be less likely to open yourself to fraud on a large scale and probably get better exchange rates.
I personally use the FairFX card - http://www.fairfx.com and find it to be a great travelers resource.

Wendy

[Anne]

thanks very much for the clear, instructive advice given here. much appreciated, as i've been searching for something like this. keep up the good work!