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Getting the Most for your U.S. Dollar Abroad

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Converting your dollar doesn’t have to be complicated or expensive.

Exchanging currency is always a tricky business. It seems there are so many options that it’s hard to know which one will stretch every dollar the farthest. So here’s a rundown to help you clear your head and help you keep your cash where it belongs: in your wallet.

Many banks will happily exchange your money into foreign currencies before you jet off to foreign lands. And if they don’t have the pesos, euros or pounds on hand, they’ll offer to order them for you so you’re essentially buying money. But beware. Not only do you often have to plan in advance for these transactions, they usually come with a less than desirable exchange rate. Know before you head to the bank by looking up the current exchange rate online. Feel free to shop around, too. If your bank doesn’t have a good rate, check with another one. Be cautious, though, as some banks charge extra fees if you don’t have an account with them.

Foreign currency is often available from travel agencies like AAA, as well, but it can come at a higher price than banks, so it’s probably not the best option.

There was once a time when traveler’s cheques were a popular item, but they are a hassle and a pain to use and many places like independently-owned restaurants and small gift shops won’t take them, so it’s probably not a good idea to rely on these as your only method of payment abroad.

In airports, tourist centers and the like you’re sure to find exchange kiosks. Avoid them as vehemently as you would tap water in Mexico: they are for emergencies only. It’s at these locations you are sure to get the worst possible exchange rates which is basically like throwing money away every time it changes hands.

Probably the most efficient way to pay your bills overseas is with a credit or debit card. You’ll first want to check with your bank or card issuer to check for foreign transaction fees, but if there aren’t any, using cards will get you the best exchange rate. We suggest using a reputable travel credit card for most purchases but having some cash on hand comes in handy for small purchases, tips, and places that don’t take plastic. That’s where a debit card comes in handy. Use it to withdraw cash from an ATM when you arrive at your destination and you’ll be set. But again, make sure you know your bank’s policy on foreign ATM fees. Some banks charge them and some don’t. Even so, it’s the easiest and cheapest way to acquire some cash on the go.

Keep these suggestions in mind as you explore and you are sure to get the most bang for your buck and check out our travel guides for exploring abroad!