Every country has its local or fiat money. As such, when traveling it’s always in your good interest to compare the country’s origin currency with the destination country’s currency. So, if you want to know where you can exchange any currency at the best rate. Then, you are in front of the right blog post. Only keep reading.
To start with, take for instance the U.S dollar ($). It’s fiat money issued by the government of the United States of America. That said, the U.S. dollars can be exchanged for foreign currency at a range of outlets both in the country you visit.
Let me bring to your notice that the best place to exchange currency at the best rate is at ATM outlets. So, it’s better to get the bulk of foreign currencies at ATMs abroad. The reason has been that ATM outlets offer better exchange rates than any other source, including banks in the U.S., online exchanges. And the booths and kiosks in airports and tourist areas.
At this point, I would like to say that it’s always in your own best interest when traveling to another country to travel along with a small amount of the local currency. As to help you cover immediate costs until you can reach an ATM.
In other words, according to the best financial institution, AAA, travelers should plan to carry $50 to $100 worth of local currency per person, per day. As that will help you avoid the issues that come with not having a nearby ATM in the location you are traveling to.
Currency Exchange at Banks – What you Need to Know
To start with, most major banks only exchange your U.S. dollars for foreign currency if you have a checking or savings account with them. In some cases, a bank will exchange the currency if you have a credit card with the bank. Although, some charge an exchange fee service.
But you need to know that the exchange rate that banks offer can change with the foreign exchange market. In other words, the amount you get is calculated by the current exchange rate in the market.
Be it as it may, I have had situations where some banks provide online orders that deduct from your checking or savings account. After this, they then ship the foreign currency to your home address. Although, some bank charges you for the shipping fee. But the amount charged depends on the quantity shipped.
On the other hand, some banks will require you to call or stop by a branch to order currency. That is an in-person request. It makes sense to know that common currency request or exchange. Euros or Canadian dollars, may be made available the same day, while other less-requested currencies could take two to four days to get.
By the time you run off with what you came for in that country. If you still have their currency left in your possession. Some banks can still buy it back from you. However, it will be at a lower rate. Even lower than the amount they sold it to you.
How to Convert Foreign Currency Online
It’s very easy and many times quick to convert currencies online. An example of such currency online converters is Travelex – which is one of the largest foreign exchange providers in the U.S for foreign exchange. Another company that also does online currency conversion is AAA. In the end, you can also sell back the currency to them.
How to Exchange Currency While Abroad
As I aptly said earlier, foreign ATMs basically offer the most favorable exchange rates. Although, it comes with fixed fees.
Notwithstanding, I always suggest a bulk withdrawal at the time, since their exchange rate fee is fixed. If you do, you wouldn’t need to pay such fees. Below are some fees apply for a foreign exchange withdrawal at ATM outlets:
Foreign transaction fee –this fee covers the cost of converting U.S. dollars into a foreign currency. Generally for all banks.
Out-of-network ATM fee – you can pay up to $5, this is the fee paid for using a foreign ATM
Foreign-ATM use fee – Operators handle the ATM, so they charge you this fee to cover the cost. (outside Europe and Mexico) charge this convenience fee.
Cash advance fee – If you use your credit card for the cash withdrawal, your issuer may charge this fee.
It’s important to know that some U.S. banks have worldwide alliances or affiliate banks in other countries that can make it easier for customers to get money abroad from foreign ATMs. Thereby decreasing the amount paid for fees.
In a way that makes it understandable, Bank of America customers can use ATMs belonging to China Construction Bank, an affiliate of the U.S. bank, without paying out-of-network fees.
Additionally, Bank of America is part of the Global ATM Alliance that gives its customers access without a fee to 50,000 ATMs from other bank global members such as Barclays, BNP Paribas, Banca Nazionale del Lavoro, Deutsche Bank, and Scotiabank.
Other Currency Exchange Option
In the event, you don’t have a nearby ATM or affiliate banks with your bank. You can easily exchange your currency at counters at airports or kiosks near hotels or in train stations.
However, keep in mind that these exchanges or currency conversion means don’t offer the best exchange rate. In other words, their exchange rate is always higher. Meaning you are paid less of what your money equals by the market rate. If you get the current exchange rate in the market, they make you pay a higher fee. Most times these fees are not fixed, meaning that the large you exchange the higher you pay in fees.
Other ways to Use Money Abroad without Currency Conversion Options
Finally, it makes sense to still open your eyes to other ways you can still use money when you travel abroad aside converting your money to the local currency of that country.
In other words, you can avoid the hassle of converting currency by using credit cards or special travel prepaid cards. This in many ways is even safer than to carry than a wallet full of cash. Added to the fact that traveler’s checks offer security measures if you lose it or stolen.
So other ways you can spend money while abroad are through;
- Credit Card
- Prepaid Card
- Traveler’s check
Using Credit cards while Abroad
First, you need to know that banks offer credit cards to customers acceptable outside the issued state or nation. In other words, with a credit card, you can purchase just anything you want in your destination country provided your credit card company or bank allows its use in that country.
However, you will need to choose a card with no foreign transaction fees. Although, the foreign transaction fee charged is around 3%.
However, banks like Capital One and Discover don’t charge a foreign transaction fee on any of their cards. Other issuers typically may not charge the fee on their premium or travel rewards credit cards.
Using Prepaid Card while Abroad
There number of banks and processing networks like Visa that offer Visa Travel Money Card to its customers.
As such, this can be another way to take away the trouble of currency conversion. The prepaid card in most cases is used to make debit purchases and can be used to withdraw money at worldwide ATMs.
More importantly, is the fact that you can reload your prepaid card balance in person, over the phone, or online using cash, bank account funds, or a debit or credit card. In other words, even family or friends from the country you traveled from can reload your card balance. In the event, you are out of cash.
Another thing to note is that Travelex offers a MasterCard prepaid travel card that locks in your exchange rate and doesn’t charge ATM fees. But it does charge a hefty 5.5% foreign exchange fee.
Using Traveler’s check While Abroad
Finally, some banks and American Express offer special checks that you can redeem for local currency at certain banks, foreign exchange locations, and American Express travel services offices.
That is to say that foreign retailers may also accept traveler’s checks instead of the local currency. Amazingly, if lost or stolen, they can refund you the checks so long as you have the serial numbers of the checks. Funny enough, there are no withdrawal fees, but they may charge you exchange fees. Which is not that bad.
In the End
To cap it up, now that you know that you have many options to still spend money without converting to the currency of the destination country.
As a result, your journey will be more smooth and less stressful. I have been able to let you know that you can still travel and spend your currency in the destination country without converting to the local currency of that country.