Show Me the $$: Navigating Foreign Currency Exchange

Let’s be honest: dealing with foreign currency is a hassle because math is hard (or at least it is when you’re on vacation . . . well at least for me it is). So what are the best ways to prep for spending money on your trip without getting fleeced?

Best Way: Use a Credit Card with No Foreign Transaction Fees
Currency exchange rates change daily and the best way to keep up without having to think too much is to use a credit card with no foreign transaction fees. Call your credit card company to see if they offer this on your current card. If they don’t, sign up for a new one immediately otherwise you’ll be hit with a percentage fee of each overseas transaction you make and that adds up quickly. I personally use Chase Sapphire Preferred and I LOVE it.

Order money from your bank prior to departing and be sure to see if they have partnerships with overseas banks to avoid ATM fees.

OK Way: Get Foreign Cash from your Bank Before You Depart
Most banks keep popular foreign currency on hand (such as Euros and British Pounds) or they’re available to order on their website and pick it up at your local branch. This is super convenient as the bank will debit the money from your account and then let you know when it’s ready for pickup. The big drawback is that the bank’s “exchange rate” typically doesn’t match the market rate because they use the rate from the market’s close the previous day and then add their own hidden fee “mark up.” Still, it’s a good way to have some cash on hand when you land so you don’t have to deal with . . .

The Most Expensive Way: Airport/Hotel Exchanges and ATMs
If you can avoid it, DO NOT exchange money at the airport or hotel – the rates are abysmal and you will lose money. You know how items at a corner store are more expensive than they would be at the grocery store? It’s the same idea with exchanging money at the airport or hotel: you’re paying extra for the convenience. Sure, they work in a pinch but you are getting less for your money. ATMs are a crap shoot as you will likely be charged a fee by the bank ATM and your bank. Some larger international banks have partnerships with overseas banks that will allow you to avoid fees so be sure to ask your bank prior to departure.

Sometimes There’s No Need to Bother
If you’re going to an all-inclusive resort in Mexico or the Caribbean, you really don’t need to bother exchanging money as resort staff will be happy to accept U.S. currency for tips. Bring a stack of one’s and tip a couple dollars with each drink and leave some on the table after eating in resort restaurants.