Practical Money Advice and Tips When Traveling in a Foreign Country

Some practical advice and tips around money when traveling abroad:

Tip #1: Wait until you get to the country before getting any local currency. You generally shouldn’t exchange money at home before you leave for your trip because your home bank will almost certainly offer a worse exchange rate than what you’d get if you had waited until you got to your destination.

Tip #2: Get your local currency from ATMs. Unless for some reason you need lots of local currency in cash and can’t withdraw that much from the ATM due to daily limits (e.g. you need to pre-pay an apartment rental in cash upon arrival or something), you should just withdraw money from an ATM to get local currency. Your bank will generally give you the prevailing exchange rate for the day, while currency exchange counters take a fee (even if they advertise as no fee, their fee is taken through giving you a worse exchange rate). Caveat #1: Most places most people will go will have ATMs; not all places do. But if you’re going to one of those places, you probably don’t need any of my advice.

Tip #3: Use a bank that doesn’t charge you any fees to withdraw money abroad (and ideally one that refunds all ATM fees). One popular choice is Charles Schwab (which is currently offering a $100 incentive for new members). Tip #2 doesn’t make sense if your bank charges you $5 per withdrawal in addition to paying whatever ATM fee that’s charged. Getting ATM fees rebated is particularly helpful in places that charge exorbitant ATM fees (Siem Reap, I’m looking at you).

Tip #4: If for some reason you’re too lazy to use a bank that doesn’t charge fees for foreign withdrawals and rebate ATM fees, check if your bank partners with other banks to see if you can withdraw money fee-free. For example, Bank of America is part of a global ATM alliance with banks like Barclays and Scotiabank, so they don’t charge a $5 non-BofA ATM usage fee (although they still charge a foreign transaction fee of 3%). But really, you should use Charles Schwab.

Tip #5: Get a credit card that doesn’t charge foreign transaction fees. There are so many cards that offer this perk nowadays. I’m partial to Discover and Mastercard, as I feel like they have better exchange rates (based on a very limited sample size).

Tip #6: Get a debit card that has a chip. Almost all credit cards issued in the US nowadays should have a chip, but they’re almost all only enabled for chip and signature. This means that you sometimes can’t use these credit cards in automated machines that request a PIN (e.g. train ticket machines in Europe). But your debit card has a PIN, and if it also has a chip, then you can use it when you must have a chip and PIN card.

Tip #7: Never pay in your home currency aka always pay in the local currency aka decline dynamic currency conversion. When you pay for things by credit card in a foreign country, you’ll sometimes be offered the choice to pay in your home currency or the local currency. Always choose the local currency. If you do the math, you’ll see that the amount they’re charging in your home currency is based off a terrible exchange rate, and even if you choose to pay in your home currency, your credit card still might charge you a foreign transaction fee. I can’t think of any reason why you would want to pay in your home currency (so tell me if there is one! I’m genuinely curious).

Tip #8: To get rid of your local currency at the end of your trip, go to a place that accepts credit cards and say that you want to pay part in cash and the rest on credit. For example, if you need to settle a hotel bill or you have one last dinner, you can often pay part by cash and part by credit card. This lets you get rid of all of your leftover local currency–including coins!

Have any favorite tips or advice on dealing with money in a foreign country?