Here’s what you need to know about using a bank card while traveling abroad. Pros and cons of using your bank card while traveling abroad If you find that your card has a high foreign transaction fee, you could open a new checking account (and thus get a new debit card) with a bank that doesn’t. Many cards carry a transaction fee of 1% to 5% on purchases in other countries. Debit cards protect you from fraud-if someone runs away with your wallet and you report the theft to your bank within two days, your liability for any fraudulent purchases is limited to $50.īut, before you pull out the plastic for all of your purchases abroad, check for foreign transaction fees. Typically, you should carry both a bank card and some cash. Should you use currency or a bank card?Ī bank card, also called a debit card, is an option in many countries. The rate will vary depending on the currencies and it typically changes by a few cents day to day. “Know the most recent rate before you request and on the day of your payout,” said Mark Stewart, CPA at Step by Step Business. If you’re lost as to whether you’re getting a good deal, it helps to take a look at the exchange rate. While a traveler’s check might provide refund options, a litany of transaction fees can often eat away at your funds. Traveler’s checks are another financially inefficient option worth avoiding. You could be hit with a $5 to $15 fee on top of an exchange rate that’s 10 to 15 percentage points more expensive. The reality is that airport kiosks tend to have outlandishly unfavorable rates. While it’s convenient to exchange currency right before or after hopping on a flight, it’s also very easy to significantly overpay. What to avoid to exchange your currency for cheap For example, you might only be able to exchange paper currency, leaving you stuck with coins. However, there are often limitations on their buyback programs. Many are willing to buy select foreign currencies. Typically, the best option to turn leftover currency back into greenbacks is to head back to your local bank or credit union. Where to exchange foreign currency back in the U.S. If your bank is international, you could also find a local branch at your destination. Typically, you’ll be able to withdraw the local currency with more competitive exchange rates and lower fees than what you’d be able to secure at a kiosk. We recommend you skip the airport currency exchange, as tempting as it may be, and find an ATM within your bank’s network. You can often find costs embedded directly into a less-than-ideal exchange rate.Ĭompare the rate you’re being offered to the exchange rates from a competing national bank or at before committing to the transaction. CitiBank charges $5 for next-day delivery on transactions under $1,000 and Bank of America charges a $7.50 delivery fee, though the fee is waived on orders of more than $1,000.īefore you hit the confirm button though, double check that the exchange rate is reasonable. A particularly convenient option is to have foreign currency delivered directly to your home. The days leading up to an international trip are often hectic. “This method is one of the best for obtaining currency because there are no fees, and you’re guaranteed genuine currency,” said certified financial planner Joel Ohman. Whichever path you take, exchanging currency through a bank prior to your trip can limit costs and give you certainty that you’re receiving actual currency. AAA members, for instance, can visit a AAA branch and exchange currency for no added fee. Other, non-bank entities, allow for currency exchange. Bigger banks, such as Wells Fargo and Bank of America, typically offer more of these options than smaller banks or credit unions. currency for a relatively minimal cost, or none at all, and in the manner that best suits your needs, including online, through a bank’s mobile app, in a branch or over the phone. Many banks and credit unions allow you to exchange U.S. The key is to do it in the most cost-effective manner, and before you actually take your trip. If you opt to carry some spending cash while traveling, exchanging currency is a necessary part of the process, whether you’re actually trading physical dollars or withdrawing funds from your account as foreign currency. You don’t want to be caught in the position of needing funds in a foreign country without the means to access them. Not every vendor will accept cards, meanwhile your plastic may charge a foreign transaction fee on every purchase. Why exchange currency?Ĭarrying local currency is a smart move for travelers. Plan ahead to avoid overpaying for the currency you need to get around in another country. But mapping out an efficient plan to exchange currency can also lead to significant savings on your trip. When traveling abroad, savvy travelers shop around for the best deals on flights and accommodations.
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