Exchange rates can mean the difference of losing or making a few dollars with each transaction. When it comes to credit cards, cash, debit cards, wire transfers, and ATM fees, you should expect to pay more for the service of converting one currency to another. Be sure to understand how each of these methods work so that you have the lowest fee and the best exchange rate.
Know The Conversion Rate
With so many methods of payment, it’s important to contact your bank and credit card company to understand exactly how the charges work. Remember, exchange rates vary by the second, but that doesn’t mean that you will get that exact rate. You’ll want to ask:
- What exchange rate do you use?
- Where can I find this exchange rate?
Since the rates fluctuate so often, and in some cases dramatically, you’ll want to check the exchange rate regularly to know what rate you’ll get and when you should make large purchases.
Check For Any Fees
Many credit cards charge an international transaction fee added on to each purchase. The good news is that there are some cards that waive this fee altogether. If you plan to go abroad for a lengthy period of time, consider looking into one of these credit cards and this can certainly save you money in the long-run.
Not all banks are available worldwide and you may be charged a fee by your bank as well as the bank you use to withdraw money. Take some time to investigate the presence of your bank in your host country – do they have ATM’s in your destination country? If not, do they have a partnership with another bank in your destination country? Either way, it’s important to ask how your debit card will work overseas and what the fees are.
Exchanging money is another way that you can get local currency, but try to avoid doing this at the airport, train stations, or over touristed areas since it is typically more expensive. Remember that the rates given by a bank or currency kiosk can vary, and thus you’ll need to evaluate your options. They all will include a fee to convert one currency into another. The best place is typically at a bank, although in some cases you can find favorable rates in hotels.
Overall, credit cards and debit cards are typically the best way to get local currency (that is, if ATM’s are available in your host country) and to make large purchases. Be sure to ask about security on your credit/debit card, however, to make sure you understand the policies in case your cards get lost or stolen.
Want to learn more about exchange rates? See how to make exchange rates work for you.