3 Things to Know About Currencies While Traveling
My husband and I recently returned from a trip to Iceland, where I had to pay exceptionally close attention to prices, not just for the sake of being thrifty, but also to make sure I knew just how much of a difference there is in the conversion of the Icelandic Krona and the U.S. Dollar.
That inspired me to write this piece on currency concerns while traveling. For those who travel often, this should be second nature, but for those who are going on a trip for the first time or don't get out as much, here's some important advice when it comes to FX (currency conversion) rates...
1) Do NOT Convert Currency BEFORE You Travel
This is tempting to do, especially since you'll feel comfortable having the local currency in your hand before you land in your destination. However, there are two big problems with this...Firstly, banks in the United States rarely have physical foreign currency readily available when you ask for it, so you'll usually have to wait a few days for them to place an order for you at an even larger bank. Secondly, you'll be required to pay a conversion fee, an order fee, a processing fee - or all three - in order to receive your cash. This may be a fixed amount, but it could also end up being a percentage of your total cash order. If you want $100 worth of a currency and the conversion is 20%, that means $20 is gone immediately. Not to mention, the exchange rate could drastically change before you actually travel. Not worth it, kids.
2) Airport Currency Converter Stations Are A Rip-Off
Next, you may be tempted to convert your dollars into local currency once you arrive at the airport in your foreign country. This is also a mistake. The exchange rates used at these stations are generally much higher than current market rates - meaning that you could end up just giving the station workers 20%-40% more money that they will ultimately pocket. It IS a business after all. If you want proof that this is a rip off, check their currency conversion rates (i.e. $1 USD will buy you X of GBP, EUR, JPY, etc.) against what Google tells you the current rate is -- you'll be shocked to see just how much more you will pay.
3) Get Cash From A Foreign Bank ATM - Always!
So, Jenny, what do I do now? Figure out the names of major national banks in the country you are visiting - do NOT go to just any ATM. Make sure it is an ATM that is attached to or associated with a major bank so that you don't risk getting ripped off by some "money box" that a scam artist set up. Not trying to scare anyone, but it's much easier dealing with a bank. Your bank in the U.S. may charge you a 1-2% foreign transaction fee on your bank statement, but that's a small price to pay versus everything else. ATM's associated with banks will always use the current day's exchange rate to calculate how much money it will dispense - it's an easy and honest way to make sure you're getting as much cash as you possibly can. Easy!
What are some of your favorite travel and money tips? Share them below! Happy Friday!