Travel Advice - Buying foreign currency
When traveling outside of the US, you will need to
use the currency issued by the countries you will visit.
1. A key
issue to understand is that you will be buying a currency by selling
- In this transaction, you are interested in
finding the most favorable rate, so that you can buy the currency you
need for the least cost.
- Just as in any shopping, rates vary by currency
and may vary by type of seller.
- Money can be bought at banks, exchange offices,
Bureau de Change offices, or ATMs.
- Additional fees are tacked on to currency
transaction (e.g. a service fee), so ask the rate and if the seller
charges any additional fees.
generally, provide the most favorable exchange rates. In addition, ATM’s
undeniably provide the greatest convenience when buying foreign currency
with you bank card.
- Check to make sure that your bank belongs to an
ATM network that provides international service (for example, the
Cirrus, Plus, or Star networks).
- When using an ATM for currency exchange, you may
be charged additional fees from the agent bank (the bank owning the
- In addition, your bank (the issuer of the ATM
card) may charge a service fee for the transaction, a second fee for
using an out of network ATM, and a third fee for foreign currency
- Contact your bank for details on their ATM fees
before you depart. If you have accounts at several banks, bring the card
that has the lowest fees (as long as it in part of an international
- Even if there are additional fees, using
ATM's to obtain foreign currency is often more economical and more
convenient than other methods of buying currency.
- If you use an ATM, withdraw enough cash to last
several days. Doing so is convenient and avoids piling on fees
that might accompany each transaction.
Cards can be used to buy currency but "buying" money is considered a
"cash advance" by the credit card companies.
- The interest rates and fees charged on "cash
advances" are very high. We do not recommend using your credit
cards for this purpose, since the interest rate fee can be avoided by
using an ATM card or cash to buy currency.
- In addition, the credit card company may charge a
foreign currency transaction fee for converting your home currency into
the national currency you want to obtain.
4. If you can
avoid it, do not buy currency at the airport when you are departing for
foreign travel. In general, transaction fees at airports are high and
the exchange rates are unfavorable.
recommend buying foreign currency once you arrive at your destination.
- Most "ports-of-entry" (airports and seaports) are
equipped with ATMS and a Bureau de Change to assist the traveler in
converting currency. While the ATMs will always be "open"
the Bureaus may operate on more limited hours.
- Most ATM fees do not vary based on location
within a country, so you should not be penalized for using one at a
port-of-entry, but there may be a surcharge imposed by the ATM's owner
or the network. Check with you bank before you depart to
understand the fee structure. Finally, additional fees should be
mentioned during the transaction.
- The Bureaus de Change at ports-of-entry locations
usually provide unfavorable rates.
- If you use the Bureau de Change, exchange
enough money to cover the expenses for your first day (e.g.
transport to your hotel and a couple of meals).
- Once you find a reasonable sized city, you will
likely find an opportunity to exchange at a lower rate than was
available at your point of arrival.
your money with an eye on the exchange rate, as currency markets
fluctuate on a daily basis. Try not to acquire more money than you will
spend on vacation, as you will be forced to sell it back at a discount.
Yes, they get you coming and going!
Converting money - the process
you are using an ATM for exchange purposes, you use it in the same
manner that you would make a withdrawal at home. Some ATM's ,
particularly in tourist areas, may provide multi-language instructions.
Check out our article on
ATM use abroad to find out some
tips that will help you conquer a foreign language ATM.
- First, make sure that the ATM works with your
ATM’s network (usually printed on the back of your card (e.g. Interlink,
Plus, Star, Cirrus).
- Next, insert your ATM card and enter your pin or
- Next, select the function "withdraw" and the
- Be sure you understand the exchange rate and how
much money you are requesting.
- If the ATM can print a receipt, be sure to select
this option, as it helps keep your accounting straight and
indicates any fees that you may have paid.
- Make sure that your request does not exceed the
amount your bank allows you to withdraw in a 24-hour period (check on
this before your departure).
- If you have done everything correctly, take the
money after retrieving your ATM card.
2. If you want
to buy currency at a bank or Bureau de Change, spend some time shopping
for the best rate. All businesses that provide currency services feature
an electronic sign indicating the rate at which they buy and sell
- Banks, often, have the best rates and lowest
transaction fees. Conversely, the "Change" businesses on tourist
streets will advertise "no fees" but normally make this up by providing
an unfavorable exchange rate.
- Once you have selected a vendor, simply provide
them with the number of dollars you want to convert and they will tell
you the rate and the amount that will be returned in the foreign
- You can use travelers checks instead of cash but
you may be charged a fee to convert the travelers check to dollars,
which you then will use to buy currency.
- If you want to avoid the extra cost of exchanging
travelers checks in dollars, see our article on
traveler checks: however, traveler checks are not as flexible
as cash for currency conversion or shopping. (See our article on
cash and cash equivalents).
Never buy currency from someone on the street.
Buying currency from anyone who is not officially authorized to sell
currency is a crime in most countries. In addition, these
sales are often set-ups that come with the arrival of fake
policeman who threatens to arrest you, unless you return all of the
money to him (while the seller walks away with your dollars).
amount of cash you withdraw, protect your cash and your card by using a
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