rtw travel, tips December 9, 2013
Today I have a question from a reader about money exchange!
Nicole sent me over this question:
“Hi, Arnette!! My boyfriend and I are fellow Canadian nomads. We are planning a round the world trip in June 2014. One of the concerns we have is about money exchange and how we can do it in a cost-effective way. I am concerned most of our savings will be going to foreign currency exchange. I am struggling to find a blog that even talks about money exchange? What have you found is the cheapest way to exchange funds?? Thanks so much! – Nicole”
My response:
Hello, Nicole!
Thank you for your email. I am not a money exchange expert but I’ll share my experience from my travels.
Money exchange when travelling especially on a round the world trip is a tough one. I always find that no matter what happens you’ll always lose out on the exchange because someone has to make money in the end and it’s definitely not the traveller!
What I did/do:
I’m a resident of the USA so I have a Charles Schwab bank account. Because I was travelling on a round the world trip, I specifically opened this account before I left. There are no fees for ATM withdrawals anywhere in the world including the United States. I do get charged initially but at the end of the month, my account is credited back for any ATM fees. Since I no longer live in Canda, I am not sure which Canadian banks have little to no fees for international withdrawals. Perhaps try a bank that has a lot of branches worldwide like HSBC, etc.
**If you’d like to open a Schwab account, click this link and use this code: REFERNPAVB**
Taking out cash in Tokyo
Financial tips:
- I put my savings in a high-interest savings account which earned me more interest than a typical savings account. I would then transfer money in between the high -interest savings account to my Charles Schwab account when I was ready to take some money. We might as well make some interest while we’re travelling since money is just sitting there!
- When arrived at a new airport/country, I would find a bank affiliated ATM machine to take out money (be careful of foreign money exchange bank machines). Because I have a Schwab account, I was not worried about taking out smaller sums because I wasn’t charged service fees. You might want to take out more money to incur fewer fees. I also didn’t take out large amounts because I was concerned about carrying a lot of cash because I am a solo female traveller.
- I carried US cash in different denominations for anemergency situation and necessity. As an example, when entering Vietnam and Cambodia, they want US cash for your visa at the airport/border. Make sure the US cash that you carry always stays crisp. If bills are overly wrinkled, they do not accept it.
Yen yen bills y’all
Trip money tips:
- I socked away $100 US in a weird random hidden spot. In the case of an emergency, I could get myself out of a sticky situation with the money. When I was in Cambodia, I had my bank card stolen so it was handy to have cash on hand. I also carried another backup ATM card for this purpose (helpful when on a long-term trip). It will be handy for you and your boyfriend/friend/husband to carry separate cards for this reason.
- Sometimes you may have excess money left over because you took out too much. If I was leaving via an airport and had leftover funds I would just go to the money exchange and change it for the next destination’s currency. Try not to exchange at the airport, it’s the worst rate. But at that point, what are you going to do with the money? I still have money from Indonesia, Singapore, Hong Kong, Europe (Euros), the Czech Republic, and the Philippines. I am hoping that I can use them for future trips! Some airlines like Qantas collect any coins on the flight and give them to charity. I hate the extra weight on me, so I donate it.
- My best recommendation would be to get a travel-friendly bank account, bank card, and credit card. Give yourself time to open up a new account and apply for a credit card.
Trip tips:
- Make sure that you let your bank and credit card companies know you are travelling around the world. Nothing is worse than being in a foreign country and not having access to your funds. It happened to me once so now I always call in to let them know.
Do you have money exchange tips to share? Leave comments below!
SAVE THIS TO PINTEREST
MORE TRIP PLANNING RESOURCES
HELPFUL GENERAL TRAVEL TIPS
- Flights: Find a cheap flight using Skyscanner or Momondo. I like these two booking sites because they both search all websites and airlines around the globe including budget airlines.
- Accommodations: I use Booking.com or Tripadvisor to find the best rates on hotels. Hotels.com offers a free night after booking 10 nights.
- Get up to $40 off your first Air Bnb stay by using this code!
- Travel Insurance: Having gotten sick on my travels in the past, I never travel without being insured. You never know when something may happen. For my round the world trip and extended long-term travel, I use World Nomads. For other trips, I have used Roam Right and they cover activities like extreme sports.
FAQs
To avoid high exchange rates and fees, remember to stick to ATMs when you are abroad, no-transaction-fee credit card purchases, and paying in local currency whenever possible, and refrain from converting money at airport kiosks, and hotels, and paying for purchases in U.S. dollars.
Should you exchange money before traveling internationally? ›
Before your trip, it's best to do a currency exchange at your bank or credit union, which likely offers better rates and fewer and/or lower fees. Your bank or credit union may buy back leftover foreign currency in exchange for dollars when you return.
Where is the best place to exchange currency before a trip? ›
Head to your bank or credit union before you leave to avoid paying ATM transaction costs. You may even receive a better exchange rate. Credit unions and banks will exchange your dollars into a foreign currency before and after your trip when you have a checking or savings account with them.
Is it better to exchange money in home country or abroad? ›
Consider currency conversion options at local banks - If you need to exchange currency while abroad, consider visiting local banks in the destination country. Local banks often offer competitive rates and may have lower fees compared to exchange offices or other establishments catering primarily to tourists.
What is the most economical way to exchange currency? ›
The following are some of the best and least expensive places to convert currency:
- Local banks and credit unions usually offer the best rates.
- Major banks, such as Chase or Bank of America, often offer the added benefit of having ATMs overseas.
- Online peer-to-peer foreign currency exchanges.
Ordering currency from your bank before you travel is almost always better than using the airport currency exchange. Sally French is a travel rewards expert who joined NerdWallet in 2020.
Is it better to get euros in the US or when you get to Europe? ›
Resist the urge to buy foreign currency before your trip.
Some tourists feel like they must have euros or British pounds in their pockets when they step off the airplane, but they pay the price in bad stateside exchange rates. Wait until you arrive to withdraw money.
How do I get the best deal on currency exchange? ›
Best: Use a debit card at an ATM
Your best chance to get money at a great exchange rate, with no extra fees, is to draw cash from your account through an ATM operated by your own bank or its partners. For example, Citibank allows customers fee-free use of its ATMs in 20 countries.
How far in advance should I exchange currency? ›
For large amounts, especially if they are less common currencies, place an order at least a few days in advance to ensure you can pick up as much as you need. You'll probably be able to lock in the exchange rate then and there.
Is it better to go to bank or currency exchange? ›
Exchange rates at banks are slightly better than elsewhere. You can also order currency before you leave on your trip from a number of websites that will ship it to your home within a couple of days.
Use a debit card
Most providers will charge you for every transaction you make overseas, but you can find credit or debit cards that will cut the cost of your spending abroad.
Is it better to use credit card or exchange money? ›
When you exchange cash, you get a significantly worse exchange rate than when you use a card. The difference can be as much as 6%. This is why using a card is better. However, you should not use a credit card to get money out of ATMs.
How do you get the best exchange rate when traveling? ›
Once you've embarked on your trip, avoid exchanging money at airports and hotels, where rates are higher. Instead, opt for local banks or withdraw local currency at ATMs. It's also a good idea to bring a credit card that doesn't have foreign transaction fees.
Should I get foreign currency before I travel? ›
One of the best ways to minimize currency exchange fees is to visit your bank or credit union before you leave the U.S. to exchange dollars for the currency of your destination.
How do you maximize currency exchange? ›
A direct approach to retaining more of your money is by circumventing exchange fees. These fees, whether as commission charges or service fees, can significantly increase the cost of currency exchange. To minimise or avoid these fees, consider using credit or debit cards that offer fee-free international transactions.
What is the cheapest way to convert large amounts of currency? ›
You'll typically get the most competitive exchange rates on currency and the lowest fees by using a specialist online currency broker. There is a wide range of choice of providers and they'll show their exchange rates, plus any fees and charges, on their website so you can easily compare before going ahead.
Should you bring cash when traveling internationally? ›
Many international merchants prefer cash since credit card processing fees and exchange rates affect their profit. Consumers can help cut out those costs by paying with cash. Thus, the vendors are more willing to negotiate on the price of goods or services. And who doesn't like to brag about the deal they got?
Is it better to exchange money or use a credit card? ›
Our advice? Use a credit card with no foreign transaction fee when possible. Or get your cash as local currency from a local ATM when abroad or from your bank before your trip. If you do decide to use a currency exchange, do your research and assess the exchange rate and other fees beforehand.
Is it better to pay in your currency or foreign currency? ›
It's always better to pay in the local currency when you're on holiday. If a retailer offers to convert your card transaction into pound sterling, politely decline and continue with the transaction in the local currency. So if you're in France, pay in euros, if you're in the United States, pay in US dollars.
