The global economy never sleeps and neither do foreign exchange rates. Depending on the strength of the economy, your currency exchange will reflect inflation or deflation as well. So while you can’t change the supply or demand, there are things you can do to make your money go further.
While foreign currency rates may seem pretty clear-cut, getting the best rate may take a little planning. And, just like any service that offers convenience, there will be fees attached. Here we take a look at some of the popular ways to convert your money when traveling abroad so you can determine what works best for you.
Option 1.
Exchanging Currency at the Airport
One option for currency exchange is to swap cash for currency in the airport. According to Investopedia, airport shops and kiosks are the worst places to exchange money.
PROS:
- Easy – Kiosks and shops are in the airport.
- Fast – You’re already at the airport so there’s no going out of your way.
- Accepted Everywhere – Some places won’t accept cards, so having currency (like cash) on hand is convenient.
CONS:
- Exchange Rates Fluctuate – You’ll need local currency soon after you arrive. The exchange rate may not be in your favor.
- Fees Apply – Not all currency exchange fees are the same and are known to be high at airports.
- Risk of Theft – Unlike a stolen credit card, if your cash is stolen it can be impossible to get back.
TIP: For the best rate, according to Investopedia, skip the airport or currency exchange store (like a shop or market) and go to a local bank or a bank’s ATM.
Option 2.
Using Debit Card and Credit Cards
You already have a debit card, so why not use it and let your bank do the exchange? Plus, if it’s stolen you can cancel it immediately. If you like the idea of using the card you already have, call your bank in advance. Some will reimburse you for the ATM fees while others don’t charge a percentage on currency exchanges.
According to Condé Nast Traveler, frequent international travelers can benefit from the Shwab Bank High Yield Investor debit card. While you’ll pay ATM fees, Shwab reimburses you at the end of the month. You also won’t pay foreign exchange fees either.
PROS:
- Fast & Easy – No need to do anything
- Convenient – Some credit cards may include card-included travel insurance.
CONS:
- Possible fees for using ATM’s (For Example: $5 per transaction)
- Possible fees for exchanging currency (For Example: 5% per transaction)
- It may not be accepted everywhere. Headed off the beaten path? You may find places that only accept their local currency.
With your Explorer Membership and a little pre-planning, you could save a lot, any and everywhere you go!
