When we started traveling globally we would take our U.S. dollars and purchase Travelers Checks. We would usually also go to a bank and change some U.S. dollars for the foreign currency we needed at our destination. This created a situation where we had our money significantly at risk since travelers checks are all to be signed right away on purchase. These days with the increase in Global banking networks interconnecting the options have gotten much easier and safer for the traveler.
U.S. & Foreign Currency
There are many developing parts of the world that are not able to accept credit cards directly at the merchants. For this reason it is very important to have some cash on you at all times. It is very difficult to find a bank that will exchange your U.S. Dollars for a foreign currency on short notice. You will be able to exchange U.S. Dollars at a currency exchange in most airports around the world. This may not be the best exchange rate because of their fee but at least you can get an initial amount of the foreign currency.
The best way to get foreign currency is to use an ATM. I have a couple of tips related to ATM use that have served us well so far.
First is to put a travel alert on you card and let your bank know when and where you will be traveling. This is critical to avoid the bank thinking your card was compromised and you are a potential fraud victim.
Second is to make sure you are using an ATM from a nationally recognized bank. The thing to watch out for here is that some ATM’s are placed around by currency exchanges or travel agencies. Those ATM’s would have higher fees and lower exchange rate values. This means you will receive less of the foreign currency as you should receive. If you use a nationally recognized bank you can get the best exchange rate available on any given day. The menus may be listed in the foreign language and it is not always obvious how to convert to English menus. I like to have the Google Translate open and using the camera feature to convert the text on the screen of the ATM. It will ask if you want to convert the withdrawal in US dollars from your bank or to just use the local currency. I always choose to use the local currency. You may want to consider talking with you bank or credit union to make sure your card has a chip in it and that you use a 4 digit pin number. Make sure you know your bank’s phone number so that you can contact them if there are any issues while abroad. Make sure you are also familiar with your bank’s maximum daily withdrawal limits.
Thirdly you will want to watch out for skimmers attached to the ATM you are looking to use. This is a device that digitally records the credit and debit card numbers that go into the machine. Most are installed loosely over the installed equipment. Grabbing and checking for loose pieces of the card slot area can help you avoid falling victim to that type of scam. Guard your pin number entry as well.
Currency Exchange Conversion
One challenge of being in a foreign country is to understand a relevant price in U.S. Dollars. This is easiest accomplished by using a good app on your phone. I don’t have an android-based device but just try a few until you find one that works good for you. I found one for Apple devices that works great for us because it handles 160+ currencies and 350+ physical units. The free version is good but I paid the few dollars to upgrade and got even more features.
GlobeConvert Currency & Units
Convert Currency and Units
Ievgenii Lebid (Developer)
Credit Card Use
Whenever possible I like to use my credit cards while traveling globally for a few reasons. It allows me to watch and account for my spending as I go. It also allows me to avoid the risk of carrying too much currency and being at risk of theft. There are other benefits to using credit cards as well. A key to remember here is making sure the credit card will not expire while you are traveling and to put the travel alerts on your cards for the dates and location you will travel.
Currency conversion is almost always done at the best rate for the day the charge was made on. Be sure to have the vendors charge the card in their local currency. This is because if you ask them to charge you in your home currency their bank will charge a fee so you will cost yourself more in fees. Simply use the local currency where you are and keep tabs on what you spent using the Currency Exchange apps.
Many cards will also provide travel or purchase protection when you use the card to make the purchase. You should call your credit card’s customer service department and ask them to explain your available benefits on the card.
Finally you can also rack up frequent flyer miles, cash back offers, or other membership benefits by using your credit cards overseas.