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.
Is it better to exchange money before you travel? ›
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.
Is it better to get foreign currency in the US or abroad? ›
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.
Where is the best place to exchange currency before travel? ›
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.
What is the most cost effective 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.
How much cash should you travel with internationally? ›
A good rule of thumb, though, is that, on average, you should plan to carry between $50 and $100 per day in the currency of the country in which you're travelling. As with all things, research is your friend here. Understand where you're travelling and what the local customs regarding cash are.
Is it cheaper to exchange money at the bank or airport? ›
It is cheaper to exchange money at the bank (or by using an ATM) than the airport. That's because currency exchange stores and kiosks at the airports mark up the exchange rate to make a profit.
How can I avoid currency conversion fees? ›
The following steps will help you avoid foreign transaction fees:
- Open a Credit Card Without a Foreign Transaction Fee. ...
- Open a Bank Account Without a Foreign Transaction Fee. ...
- Exchange Currency Before Traveling. ...
- Avoid Foreign ATMs. ...
- Ask Your Bank About Foreign Partners.
It all depends on where you're going and what you plan to do during your trip. As you can see from our travel costs table above, some European cities are cheaper or more expensive than others. As a general rule, though, it's a good idea to budget at least $100 a day for your vacation.
Is it better to get foreign currency or use credit card? ›
Using a credit card with no foreign transaction fees and choosing to make purchases in local currency will nearly always save you money. Currency conversion apps can help you better understand pricing and identify hidden charges.
Where to exchange currency before you leave
- Avoid changing money at the airport. ...
- High street banks are unlikely to be competitive on exchange rates. ...
- Look at online currency specialists. ...
- Consider a specific account for currency exchange. ...
- Use low or no fee credit and debit cards. ...
- Pay in the local currency.
Where can you exchange currency without paying large fees?
- Use airport kiosks prior to leaving the US.
- Buy traveler's checks or foreign currency cash from your bank or credit union.
- Choose an online exchange bureau.
- Buy currency on arrival at your hotel or in popular tourist areas.
If possible, consider withdrawing cash abroad as needed from ATMs. Because they're owned by banks, ATMs usually offer the most current exchange rate and feature fees that are lower than an airport or currency exchange. Remember that withdrawing from an ATM can often come with the standard $2-$5 usage fee.
Is it better to exchange currency at home or abroad? ›
If you don't have time to get cash at the bank before your trip, it can be tempting to get foreign currency at an airport kiosk or currency exchange counter. These merchants offer convenience, but their exchange rates are typically much less favorable than your bank at home.
Is it better to get euros in the US or Europe? ›
If you do want to wait until you arrive in Europe to get your euros, a word of caution. It's not usually a good idea to exchange currency at the airport, or even at your hotel. These places are definitely convenient, but you're likely to pay a premium for it. Commission fees can be high and exchange rates unfavorable.
Should I exchange money before I travel 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.
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.
What is the best day to exchange currency? ›
Mondays often experience the lowest number of trading in foreign exchange market. Therefore, you may expect the least fluctuation in price. Friday has a definite effect which is called the summary effect. There are many traders who close their positions at the end of the week.
Is it better to pay in USD or local currency when traveling? ›
Depending on the credit card you use when traveling abroad, you could pay fees that total 6% or more of purchases. Using a credit card with no foreign transaction fees and choosing to make purchases in local currency will nearly always save you money.
What is the best way to travel with cash? ›
Guidelines/Tips for Traveling with Cash
- Carry as little currency as possible.
- Carry cash in a money belt that sits on your waist (under your clothes) or a money pouch that hangs around your neck.
- Keep cash concealed and close to your body at all times.
