It used to be that local currency was the only acceptable means of payment. And the primary way of obtaining that currency was to exchange cash or traveler’s checks at local banks, airport exchange kiosks, or hotels while on the road, or purchasing foreign currency prior to departure. Getting the best exchange rate was the traveler’s version of a scavenger hunt.
Today’s options are not only more convenient and safer, but cheaper. Debit and credit cards reduce the need to carry large sums of cash, allow travelers to make purchases and obtain cash at or nearly close to the interbank exchange rate, and eliminate the guessing game of how much foreign currency you’ll need.
Debit cards are an excellent way to get cash. ATM machines are open 24/7, they issue money in local currency, and the exchange rates are close to wholesale, much better than hotel, airport, and even local bank rates. Call your bank before you leave to notify them of your travels and ensure your PIN number will work outside the country. Also, get the phone number to call from outside the US if your card is lost or stolen. Know your daily limits and don’t wait until you are out of cash to go to an ATM. They run out of money and break down in other countries, also!
For larger purchases, hotel charges, etc. consider a credit card. This cuts down on the amount of cash you’ll need and there are some purchase protections offered with some cards. Notify the card issuer before you travel so they will be aware that you will be making charges from another country. Use a card issued by a company that doesn’t charge “currency exchange fees” such as your local credit union or Capital One. If you don’t have such a card, choose the one with the lowest rate.
I recommend traveling with a VISA or MasterCard, as they are the most widely accepted. AMEX sometimes has challenges – especially with small local merchants. And Discover is not internationally accepted. If you prefer AMEX or Discover, have a VISA or MC for back up.
My personal MO is to take a debit card for cash and a major credit card for everything else. I don’t purchase currency in advance. I hit an ATM at the airport upon arrival for local currency. If there isn’t an ATM at the airport, I buy a minimal amount of currency at the exchange booth and find an ATM or bank later to supplement, as needed.
When do you exchange currency?
Like this article? Sign up for my weekly newsletter to keep up with hints, tips, and the latest travel must dos.