You’ve probably already heard (cause I’ve said it a bazillion times!) but I’m going to be traveling to Asia at the end of the week. Yay! Unfortunately, I’ve come down with a small cold but it’s OK. Nothing I can’t handle. I’m still super pumped!
I haven’t traveled internationally a whole lot so I’ve been doing my research about every single thing, from whether I need outlet converters to what the weather will be like. One thing that I didn’t think too much about in the past was exchanging money but the more I did research about it, the more I realized I’ve always been doing it all wrong!
I always exchanged my money at the airport.
Anytime I traveled internationally, I always got off the plane and exchanged my US dollars for the local currency at the Travelex at the airport. I never thought twice about it, until I did my research and found out that’s the last thing you should do. Duh, Connie! Exchanging your money at locations in airports and hotels can cost you anywhere from 10-14% more. The transactions fees or service charges are a little ridiculous and the way they bake it into the exchange rate, you don’t really notice it. You definitely pay for the convenience. If you use an international ATM or your credit cared internationally (depending on your bank or credit care), you’ll still encounter fees….just typically not as much.
Hence, never exchange your money at the airport, if you can help it.
So how do you exchange your money internationally and avoid foreign exchange fees? Here are a few tips:
- Use a no foreign transaction fee credit card – Most credit cards will charge you a 3% foreign transaction fee anytime you use your card internationally. There are some though that have no foreign transaction fees. They are typically the travel rewards cards and carry a higher annual fee. Here is a very comprehensive list from Nerd Wallet of those no-fee cards, along with what the fees are for all other cards.
- Use a no foreign transaction fee debit card – Similarly, when it comes to ATMs, using your debit card abroad will also incur fees. Typically, you will see a flat fee of about $3 – $5, plus 3% of your transaction. So yes, it can add up. Most banks charge a fee if you use a international ATM but the one I know of that doesn’t is CapitalOne 360. Also, I bank with Chase and have the Premier Plus Checking account – they will wave the first 4 transaction fees each statement period for non-Chase ATMs, including international ATMs (the 3% isn’t waive but hey, I’ll still save $5)
- Find out if your bank has international branches – If your bank has international branches, you should definitely try to use those ATMs to avoid fees. My boyfriend banks with HSBC and luckily for him, they have some international locations
- Try to exchange money at a local bank – If your bank does not have any international branches and you are bringing cash with you, you could always try to exchange it at a local bank. This is a little tricky though because many banks won’t do it if you are not a customer. Ask around, especially at the larger banks.
- Otherwise, just use any credit card! – If none of the above work, your best bet is just use your credit card. While you will incur a fee, it’s typically the smallest fee you will encounter.
Always do your homework before you go and know what the current exchange rate is. Also, don’t carry large amounts of cash with you. As a tourist, you’re a bigger target for theft.
Do you have any good tips for traveling?