In today's world, it’s easier than ever to access your money securely while traveling. Still, the topic is a source of stress and insecurity for many travelers.
We often hear questions like:
Should I exchange money at home? If so, how much?
Where is the safest place to get cash at my destination?
Can I use my credit card?
Should I use my credit card?
How do I avoid getting ripped off?
Luckily, with just a bit of information and preparation, it's easy to feel safe and make smart decisions when dealing with money abroad.
For this blog post, we are focusing on money travel tips for Europe, but most of the information below applies to international travel in general. If you have specific questions about a specific destination, please reach out to us.
Getting Foreign Currency Before You Leave
For European travel, don’t bother. You’ll get better exchange rates at your destination. If you feel you must have some local currency when you arrive, contact your local U.S. bank and have them order the currency you need, but only enough to get you by until you can get to a bank.
Understand Your Cards
At least two months before your departure, call your bank(s) and answer the questions below for each card you plan to use. If you discover your card isn’t designed for international use, consider getting a new one.
What are the foreign transaction fees?
What are your daily cash withdrawal limits?
What is your 4-digit PIN and will it work overseas?
Is the card compatible with international bank networks, e.g., Cirrus, Maestro and Plus.
Here’s a great resource for understanding debit card foreign transaction fees.
Alert Your Banks Before You Leave
To avoid a nightmare situation where you can’t withdraw cash with your debit card or pay your bill with your credit card, make sure your banks know you’ll be traveling.
Not All ATMs Are Created Equal
The best way to access money in Europe is to withdraw cash from bank-run ATMs located just outside that bank, often in a small vestibule that requires you to insert your card for entry.
Be Aware: Many stand-alone cash machines in touristy areas are NOT related to banking institutions. These machines often charge higher transaction fees, have lower exchange rates and can be less secure. Pay close attention and make sure you are using a reputable machine.
When you find a bank-run ATM, try to use the machine during the bank's business hours, so you can go inside for help if you need it. It’s also smart to go inside the bank after you have withdrawn your cash to exchange some of your larger bills for smaller bills so you don’t have trouble breaking bills on small purchases.
Know the Exchange Rate
To avoid an "insufficient funds" message when withdrawing money at an ATM, do the math and figure out how much you can take out in the local currency—not U.S. dollars—to stay within your daily limits.
Avoid Currency Exchange Bureaus
Rates and fees are typically unfavorable at exchange bureaus, so avoid them if you can. If it’s an emergency or if you have multiple types of currency that you want to combine into one, an exchange bureau may be your only option, but be prepared to incur a substantial fee.
If exchanging money is unavoidable, look for places that don't charge a commission. Also, note the difference between the rates for buying and selling. The difference between the buy and sell rates should be less than 10 percent.
Cash vs. Credit
Europe is much more of a cash society than the States. Avoid using your debit or credit card for small purchases. For larger purchases like hotel stays, fine dining or large souvenir purchases that are shipped home, you’re almost always better off using a credit card that can give you certain protections. Be sure to bring a chip-enabled card as you might have trouble using a non-chipped card for some purchases.
USD vs. Local Currency
If the merchant asks if you want your purchase to be in the local currency or U.S. dollars, always choose the local currency. Charges made in USD often have extremely unfavorable exchange rates.
Have a Backup Plan
If you’ve followed all the advice above and you still have issues using your cards, or your money is lost or stolen, here are three options for getting money in an emergency:
Bring a pre-paid Visa or Mastercard and keep it in a safe place separate from the rest of your money.
Carry some U.S. dollars in your money belt that can be used in a pinch.
Have someone at home who can wire you money in an emergency.
With a bit of forethought and planning, you will feel confident, savvy and safe when it's comes to money.