Exchange Rate Blues: How To Keep More of Your Money’s Value when Traveling

By Martin Brown

Before you leave on a trip for an exciting foreign destination you should take a few moments to consider your options for getting needed cash while abroad. Here’s a quick guide that will help you to save some money and give you that needed peace of mind before you walk up to a foreign ATM machine.

I have to admit that when traveling out of the country, my first instinct was not to use an ATM machine. I suppose many years of being trained in how to avoid fees domestically just left me with an instinct to avoid them when out of the country as well.

Turns out, that instinct was wrong. ATMs are now the best way to go when looking for local currency.

The first thing you need to realize is that you’re going to pay a fee for conversion. Whether that comes with a four or five dollar service fee for your ATM usage or a higher exchange rate, somewhere along the line paying bank fees are just part of the foreign traveling experience.

So, the real question becomes: What is the safest, and least expensive way to navigate currency exchange?

This is where ATM and credit cards come into play. Fortunately for those of us who like to travel, and who do so on business or pleasure, as we approach 2009 the international banking system is linked together in better ways than ever existed before. It makes the use of your ATM card or credit card a quick swipe away, from Beijing to Milan.

Here are a few do’s and don’ts:

1. Do tuck away a couple of hundred dollars in cash or travelers’ checks.

When computer links are down for whatever reason, it’s nice to have the back up of some “safety cash.”

2. Don’t bother purchasing travelers’ checks.

If you don’t already have them, they’re essentially an outdated and overpriced mode of travel that ATM and credit cards have made impractical. Since you only need $200 in backup cash, just carry good old fashion cash.

3. Do use ATM machines.

But remember that while they offer the best exchange rate, they are going to hit you for $4 or $5 per exchange, so don’t take out $20 at a pop, but carry as large an amount as you feel comfortable with.

4. Don’t put large amounts of cash in purses or bags.

Busy and crowded shopping areas are heaven on Earth for pickpockets who can reach into your bag and out with one quick bump that you’ll never notice.

5. Do keep that extra cash close to you.

The best place is perhaps in a money belt, or a travel pack that fits around your leg or your waist, and is kept inside your pants or under a top.

6. Don’t travel abroad without calling your bank or credit card issuer and telling them that you’ll be traveling to one or more countries.

This helps to avoid a closing off of your credit access because of a possible fraud alert triggered by your “unusual travel locations.”

7. Do know that not all ATM or credit cards charge the same fee.

For example the Capital One credit card charges no exchange rate, and currently absorbs the one percent fee currently charged by MasterCard and Visa for making foreign purchases.

Additionally Bank of America, as part of the Global ATM Alliance, allows you to withdraw cash at no charge at all from Barclays, Bank of Nova Scotia, BNP Paribas, Deutsch Bank and Westpac.

8. Don’t travel with just one credit card.

For backup, to avoid any kind of credit security bumps during your trip, it’s always a good idea to carry two cards. And remember that ATM cash withdrawals come without the cash advance fees, which can be very steep, that you’ll get hit with for using your credit card(s) to obtain cash.

9. Do use a site called as a good place to obtain independent credit card information.

A quick check of this site will give you updates at the time you are planning to travel. Currently, for example, as opposed to Capital One charging zero percent on purchases that involve currency exchange, Citibank, Wells Fargo, and Chase charge three percent, while Washington Mutual charges one percent.

Traveling abroad has never been easier for bookings, and overall accessibility. Take the time to learn some of the ways to hold on to more of your money and you’ll see your purchasing power rise and you’ll hold onto more of your money.

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