Thrifty travelers are always on the lookout for a good deal. A buffet breakfast here or a cheap room rate there—to the trained eye, spotting these deals becomes second nature and they can add up to big savings. It’s strange, then, that budget travelers don’t consider saving money on currency exchanges as important.
Sure, exchanging money is about convenience and a lot of the fees you’re paying can only be seen clearly on a bill you receive the next month, but getting a good deal, or rather a series of good deals, can save you big in the long-run.
While the best options will depend on where you’re traveling and which banks you use for your personal accounts, a few general rules will help you stick with the best exchange rates.
#1 You should be familiar with the world-wide exchange rate. The only way to know if you’re getting a good deal is to know how the currencies stack up on a global scale.
#2 It is generally better to exchange money abroad, but avoid currency exchange businesses in places like airports or hotels. Businesses in those places use their convenient location as an excuse to charge high rates.
#3 Planning ahead is key. Fewer transactions equals fewer transaction fees, but only take the amount of money you will be comfortable carrying around. Carrying around too much cash is unsafe. Planning also comes in handy when you’re in a remote place with no access to ATMs. Only change over as much money as you need, then you won’t have to change your money back and you’ll save on fees.
In terms of the best places to change money, there are a few options. Again, the best option for you will depend on your destination and your bank’s policy.
ATMs are usually the best bet for a fair conversion rate and offer 24/7 access to your money. Depending on your bank, there will likely be fees each time you withdraw money, still ATMs are usually the way to go. Check with your bank to see if they have partner banks abroad that would offer lower fees and be sure to ask about foreign transaction fees. If you travel often enough, it might be worthwhile to change banks; Capital One is a very traveler-friendly bank, as they wave foreign transaction fees. If you plan on using your credit card at an ATM be aware of extra charges, it’s best to use a checking account if possible.
A credit card is a great option for bigger purchases. Not only do they usually offer favorable exchange rates, but many travelers’ cards wave foreign transaction fees. Though your bank could wave the fees, Visa and MasterCard might still charge a one percent fee and depending on where you’re spending money, the retailer could charge you too. Still, credit cards are one of the best options and if you have a travel rewards card, each dollar spent will bring other benefits.
See Also: Top 5 Credit Cards for Travelers
As somewhat of a last resort, currency exchange businesses are an option and are often better than banks. If you know the exchange rate and you have the opportunity to shop around you could get a good deal.