FOREIGN CURRENCY FOR FOREIGN LANDS

When I was young and single, the time between Christmas and New Year’s always meant vacation planning time.  It was a period where I had more disposable time on my hands and it gave me something exciting to look forward to in the year ahead.  These days, more often than not, my vacation planning starts on the plane ride home from my last vacation; I want something to look forward to before my last travels end!  Also, more people travel these days so one has to get going sooner than later or opportunities will pass you by.

This year, my family is heading to France!  France was one of those countries we passed on when traveling the world.  We told our kids that France is just across the pond and easy to get to, so we’ll catch it another time.  Well, this year they reminded us that this summer is as good a time as any to “catch it another time” so there you go.  But deciding to travel outside your own country raises some different issues to consider with the number issue being money:  exchange rates, payment options and how and when to get the cash you need.

Travel to Ecuador, Panama or East Timor (just to name a few) is somewhat easier, they use the US dollar.  There’s no exchange rate to deal with, but unless you’re going to travel with enough cash for your entire trip, you still need to figure out how to obtain your currency.  And just because they use the US dollar, don’t think you can avoid foreign transaction fees – you are still in a foreign country and the banks will get you anytime they can.

Prior to my very first trip abroad, I loaded up on travelers’ checks; that was a very long time ago.  Now, nobody wants travelers checks so don’t bother.  Often you will have to wait in long bank lines to cash them and no one wants to have to do that.  Credit cards are easy to use but I have found that unless you’re staying in the finest of places or eating in the nicer restaurants, outside the US, nobody really wants those either.  Here in the US, merchants are much more willing to eat the fee associated with credit cards.  Outside the US, they are not eating those fees as readily.  Sometimes there are merchants that will accept credit cards but charge you 2% more than their cash price; others just don’t take the plastic.  Carry a card with you but don’t count on it being your primary source of purchasing power.  Before you leave, find a credit card that doesn’t charge foreign transaction fees.  Yes, you will still have to deal with the exchange rate (that will be there no matter what) but you can save a lot of money if you don’t have to pay foreign transaction fees on top of everything else.

I have found the number one way to obtain cash while traveling abroad is to use your ATM card.  You withdraw cash in the local currency and usually get a very fair exchange rate.  You can obtain cash as you go so you don’t have to carry huge sums of cash at any given point.  And, if you find the right banking account, you won’t even have to pay any ATM fees along the way.  Prior to our year long trip, we switched our regular checking account to the premium account at our bank.  By doing so, all ATM transactions worldwide became free of charge.  No only does our bank not charge any fees, but if the local bank charges fees, our bank will reimburse us for those charges.

I have never encountered an airport that did not have an ATM machine.  I have however, been in situations where the ATM at the airport is not working, dispensing only a limited amount of money or I didn’t have time to stop at the ATM because I had a time restriction (like the need to catch a local bus).  If you are insecure about arriving to a country without at least some foreign currency, you can typically obtain some from your bank at home (plan ahead, it may take them a little while to obtain it for you) or exchange money at the airport at a foreign currency exchange.  Please note that typically you receive a terrible exchange rate at these exchanges so don’t plan on getting a lot of money there – just get what you might need until a better option presents itself.  While the advertised rate may look good, fees and or service charges tacked onto these rates quickly turn your transaction into a WIN for the exchange and a major LOOSE for you.

If you are traveling to a smaller country, take the time to research your currency exchange options.  We were heading to Easter Island and discovered there was only one ATM machine on the island and that one machine only worked off of ATM cards linked to MasterCard.  Our bank ATM cards were linked to VISA.  We needed to obtain large amounts of cash in Tahiti (our stop prior to Easter Island) and then exchange them to US dollars before arriving to Easter Island where we could take our US dollars and convert them to the local currency.  We got screwed on the exchange rate twice but at least we had money to pay for stay!

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