Depending on which resource you access, there are approximately 180 different currencies in the world. So, if you plan to visit several countries in any given year, as many of us do, you are presented with the challenge of how to exchange money, what to do with the money when you leave the country, and dealing with exchange rates. I asked several frequent travelers their tips on doing all of these and summarized them below.
Getting foreign funds on arrival:
Most travelers use the ATM at the airport stating that this is the most efficient way of getting local funds, securing immediate cash for transportation, liquid refreshments, and other incidentals. The alternative is to exchange money at the currency exchange booth. The jury is out as to which one has a better exchange rate but the ATM wins for ease of transaction and not having to carry large sums of cash to convert.
If you are carrying cash to exchange in a foreign country be sure the bills are in good condition. You should bring newer $100 US notes as they bring a better exchange rate in many countries. In some cases, older notes are not accepted due to certain year notes having been widely counterfeited. So, stick to newer notes. Some countries have separate exchange rates for $100 bills, $50 bills, and then all other denominations. I have only experienced this once in China where I got a slightly better exchange rate for the hundred dollar bills versus twenties. The bills should be in good condition, not torn, dirty or worn. If a corner is missing, forget it.
Before you travel, go to www.xe.com and determine the exchange rate for the currency you’ll need, calculate how much you will need to withdraw from the ATM and write it down so you don’t find yourself withdrawing too little or too much. You can also download a mobile app for Android, iPhone, and Blackberry on the XE web site.
Travelers checks are so…..last decade. They are often associated with high fees to cash them. They’re not accepted everywhere, and well, you CAN leave home without them.
Some travelers contact their bank before leaving for their trip and let them know which countries they’ll be visiting. This serves to avoid any problems retrieving funds with their ATM card in a foreign country. I never do but that may come back to bite me one day. It’s a practice that makes good sense.
As the incentives for using our credit cards continue, many of us will use credit cards for our purchases when possible. The first rule here of course is to use a card with no foreign transaction fees.
In Asia in particular we have to watch out for Dynamic Currency Conversion where the credit card charges are calculated in your home currency and the vendor (hotel, store, etc.) determines the exchange rate. Always make sure you are charged in local currency and let the banks apply the current exchange rate. For example, if you are in Taipei, make sure you are charged in TWD not USD. This practice is especially prevalent in western hotel chains. In China, Beijing in particular, I was a victim. I had no idea of such practices but fortunately for me it was a relatively inexpensive lesson. If you’d like to read more about DCC, there is an extensive thread on Flyertalk in the China Forum titled Using credit cards in China, the great rip-off. If you’re staying in any of the major hotel chains in Asia, you should read at least the last ten pages of this thread.
What to do with the funds when you leave the country:
One friend takes all of the currency he has at the end of his trip and applies it to his hotel bill. He said he has never had any hotel refuse it. I hope he remembers to keep enough for the taxi/train fare to the airport.
Personally I never cash in my foreign currency. Cashing in currencies means you’ve paid a premium at both ends of the conversion, acquiring and selling, a losing proposition. I put the money in zipper bags, label them, and file them in a little plastic bin. When I’m ready for my next trip, I pull out the currency I need and I have an immediate slush fund on arrival. If you travel infrequently, you may just want to keep the major currencies.
So, I’ve shared the money tips I’ve discovered. What are YOUR tips for managing your money when you’re traveling?
Christine Krzyszton lives in Northern Michigan and has been writing about her weekend adventures for over five years for weekly newsletters, a baby boomer blog and a regional men’s magazine. She is the author of How to see the World in a Weekend, available in print and KINDLE on Amazon.com. Christine currently has top status with three major airlines (AA, UA, and DL) and is working on a fourth (A3).