Planning to go on an international trip? If yes, you will need to have the country’s local currency with you to sort out expenses like transportation and feeding. This brings up the question, when should you exchange to the local currency? Before the trip or during the trip? In this article, we discuss the different options for exchanging USD to a local currency.
Why Do You Need to Exchange to Local Currency?
The UN recognizes over 180 currencies as legal tender, the most used being the US dollar, Euro, Great British Pound, and Japanese Yen. If you are on an international trip, you will likely be unable to use your home country’s currency. You don’t want your rickshaw driver looking confused when you pull out bills in USD rather than their local currency.
Also, one of the best reasons to travel is to explore different places, try out restaurants, get some souvenirs and so on. In a major city, you may be able to pay for some of your purchases with a card but keep in mind that most local vendors take payments in cash. For this reason, it’s best to always have some local currency with you.
Exchanging Currencies Before Your Trip
Having cash with you before a trip saves you the stress of figuring out where to exchange it after your journey. One of the best ways to exchange currency before a trip is from your bank or credit union. Many banks offer different currencies, so you can visit your local branch to make inquiries. You can also order online from your bank and have it delivered to your home before your trip.
Exchanging Currency During Your Trip
Most countries have exchangers at hotels and airports to help travelers exchange into their local currency. They offer different exchange rates, so you may need to look around for a good deal. Just try as much as possible to avoid airports and unreliable foreign exchanges because they charge high fees or might scam you.
Also, If you are traveling to a rural area, you may find it challenging to exchange USD to the country’s currency. For this reason, it’s best to leave home with some cash.
Traveling With Cards
If you dislike carrying too much cash with you, using a card can be an easier way to pay in a foreign country. If you are in a country where you don’t have to pay for everything in cash, you have the option to:
Use Credit and Debit Cards
A good option to pay when traveling internationally is using your credit or debit card. However, you need to confirm if the card will work where you are going and if your bank will charge a fee. Also, keep in mind that many less developed countries take cash payments, so it may be difficult to pay with your card.
Carry Foreign Currency Cards
If you’d rather not carry cash, you can get a foreign currency card by applying to your bank or other financial institutions and fund your wallet before traveling. Meanwhile, this may not work if you travel to rural areas where they mainly accept cash for purchases.
Withdraw From ATM
Many US banks have global ATM networks in different countries where you can withdraw using the current bank rate. The downside is that foreign ATM’s charge fees in addition to what your bank will charge you, so it will be more expensive.
Where Can You Exchange Currencies
There are different options to exchange USD for your international travel, and some of the most popular ones are:
Many airports have kiosks that take care of currency exchange. Once you get to the airport, you can conveniently locate the foreign exchange desk and get your money exchanged.
However, exchanging at the airport is not recommended and is only good for emergencies. This is because they charge higher exchange fees than banks and other exchange companies. However, if you are traveling on short notice, airports offer the convenience of exchanging currencies really fast.
One of the best places to exchange currencies is in government banks. They offer a reasonable exchange rate, and it is less expensive compared to exchanging at airports or local markets.
You can also exchange money through private currency companies before or during your trip. Private exchangers often compete with one another, and the exchange rate depends on the provider. For this reason, you have a great chance of getting good deals if you compare different exchangers.
Tips to Exchange Currency For International Travel
Sometimes, currency conversion can incur additional expenses if you don’t follow the right tips. Here are some ways to avoid unnecessary expenses with currency conversion:
Don’t Leave It Until Last Minute
If you’ve made travel plans to go abroad, you need to sort out how you will get money in local currency. It’s not a good idea to leave it until the last minute because you have fewer options and may need to settle for a poor exchange rate. A good idea is to exchange some currencies that can last you a day or two before you set off. Then, when you get to the country, you can exchange more to cover your needs.
Before you exchange USD, you should compare different rates, dealers, and exchangers to help you find the best rates. Different bureau de change offices offer different rates, so be sure to always compare.
Watch Out For Foreign Transaction Fees
If you are traveling to a city where you can use your credit/debit card, then you can forget about exchanging currencies. However, your card may charge a foreign currency fee on every purchase you make in another country. This fee can be up to 3% or more of your transaction, depending on your bank or card.
If you intend to pay with your credit cards, call your bank to ask if they charge a foreign transaction fee. If they do, you may want to get a credit card that doesn’t charge foreign transaction fees.
Pay in Local Currency
When you purchase with your card abroad, some merchants will present you with the option of paying in USD, or the local currency. It may seem cheaper to pay in USD, but it’s not because you end up paying currency conversion fees. If you are ever in such a situation, always pay in the local currency instead of USD.
Before you make travel plans for an international trip, put some thought into how you will get cash in the local currency. If you are looking for affordable travel and avoiding extra expenses, keep an eye on the exchange rate and exchange at the right time and place.