You’re traveling internationally and are a little confused about the currency. If it’s your first trip it can definitely be nerve-racking when it comes to traveling Internationally and dealing With Currency
In this post, I give you a few tips that will make understanding currency less stressful.
The Basics of Currency Exchange
Not all currencies are equally valued. There’s no one main financial institute that determines their measured values.
Instead, the balance between any two countries currencies is always fluctuating. The factors that determine a country’s currency value is determined by each country’s inflation, debt, interest rates, political stability, and trading agreements.
The measured value of any two currencies is communicated as the exchange rate or, to put it simply, how many units of one currency you would need to buy a unit of the other currency.
Why am I explaining this to you? Because when you are traveling abroad and using a country’s currency the stronger the dollar (your home currency) is in relation to the international currency, the less you have to spend in your own currency while you are abroad.
Contact your bank and credit card company
When traveling internationally, you’ll want to contact your bank as well as your credit card company. Let them know your dates of travel and where you will be traveling.
The last thing you want is your accounts to be frozen because they think there’s fraud going on. Contacting your financial institution about your international travel should be your first task; believe me, doing so will help avoid a headache later.
Currency Exchange Phone Apps
There are many apps out there that are fantastic currency converters. My Currency Converter and XE Currency are a couple that is simple to use and come highly recommended by others who travel internationally and use other currencies often.
Also, look into having an app that you can use offline. Having this option is a great tool when WiFi is spotty and you need to quickly convert currency.
When to exchange your money
When people travel internationally, most believe they need to exchange their money before leaving the US and that could cost you more in the long run.
The exchange rate tends to be higher if you choose to change it before you leave. Wait until you are abroad. You can exchange currency by simply using your debit or credit card at ATMs throughout the airport you land in.
However, use caution here as well. Consider your bank fees for international ATM withdrawals coupled with the exchange rates they charge. Some, but not all, banks return your fees at the end of the month.
It’s important to determine if the fees are worth withdrawing your money as you go or exchanging a larger amount a few times during your trip. It might suit you better to take out the amount you’re going to need for your whole trip.
This might save you in bank fees. Be cautious about this too, carrying a large amount of money is not always wise. If you should lose it or it gets stolen, the small amount of bank fees you saved wouldn’t be worth it.
There are also currency exchange booths in most airports. But be advised, these exchange booths have the worst exchange rates and charge a large commission. It would be best to use credit cards (as long as they don’t have foreign fees) and or cash.
Keep an eye on your cash!
When you are using cash to pay for something make sure that you are receiving the correct change back.
Unfortunately, there is deception everywhere. Foreigners are often short-changed. Use those apps I talked about so you can avoid this.
Before your trip home
Before you return home be sure to use your foreign change. It’s often a hassle and not worth the fees to get smaller amounts of international currency exchanged back to the U.S. dollar.
Most banks simply won’t exchange coins or small amounts of foreign currency because they don’t carry it. Unless you want to collect different currencies for memorabilia, spend the last little bit in country.
If you have a larger amount, exchange it back to U.S. dollars before you return home.
I’m a perpetual traveler and am abroad a lot. I find that using my debit card for my purchases is easier, safer, and cheaper than exchanging larger amounts. This does depend on your bank so do your homework before you make your decision.
It can be stressful to use foreign currency when traveling abroad, but by doing a little research and preparing ahead of time it can be one less hassle to deal with.