Some good tips in the NYT this weekend for people traveling internationally, and looking to avoid onerous currency exchange fees while maintaining convenience. The short version:
1) Take out money from your home checking account from an ATM at your destination, instead of at an exchange counter. The 1% conversion fee that Visa/MasterCard add to the transaction is comparatively cheap. Avoid credit card cash advances.
2) Try to get a credit card that doesn’t add extra percentages to the Visa/MasterCard standard 1% conversion fee. I have an account with my longtime credit union (highly recommended, if you’re eligible to join), which adds no additional charges. Shop around.
3) Read up about your destination to see what will work best — some combination of credit cards, travelers checks, and cash. Bring small bills. Consider wearing a money belt.
On this last point, two small tales:
Over the weekend, I started some very preliminary research into a possible future vacation to the Patagonia region of Argentina and Chile. One hotel on the Argentinian side, and by no means a hovel, indicated that they only accepted cash, bank checks, or personal checks (!?). No credit cards. Given its location in a touristy area, I was surprised that a hotel of decent caliber would not accept cards, but this reinforces the axiom that you need to check ahead.
Second, there are rare moments when foreign currency is worth more than the exchange rate. This past December, on a trip to St. Martin in the Caribbean, I witnessed restaurants in the beach town of Grand Case that accepted both US dollars and euros — at a 1:1 ratio. With the euro worth approximately $1.25, these restaurants were giving a 20% discount to those paying in American cash. Why??
Apparently, the strength of the euro was deterring American visitors from spending their money on the French side of the island, so the discount was an incentive to attract American tourists. Discounts were for cash only; credit cards would be charged in euros. There were no similar discounts on the St. Maarten side, where the Netherlands Antillean Dollar is the official currency. Needless to say, we had some excellent meals on the French side, at great discounts.
Bottom line: read up on your destination before your trip to see what kind of cash to bring.
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June 26th, 2006 at 5:53 pm
One other snag: theft. If your itinerary involves overnight train rides, etc, then maybe carrying less cash and charging on the card is a good option.
June 26th, 2006 at 5:08 pm
ATM cash is definitely the way to go. The exchange rate is excellent, and the foreign ATMs I’ve used in recent trips (Thailand; mainland Greece & Crete) don’t hit you with a per-use fee — even at foreign branches of US-based banks such as Citibank. My local bank doesn’t charge for using other banks’ ATMs, so I completely avoided transaction fees.
The biggest snag in this approach is any per-day or per-week limit on ATM withdrawals.
June 27th, 2006 at 9:52 am
Theft is a risk, I agree, but one that counsels for carrying less extra cash. There’s generally going to be another ATM at the end of that overnight train ride, methinks.
June 27th, 2006 at 7:15 pm
Check your cards. I used to use a Wells Fargo card and they had a per-transaction fee that pretty much did away with any savings from ATM transactions. Now I use a credit union card – much better. Also – know before you go: some countries (e.g. Japan) are not card friendly (neither bank cards nor credit cards), so it does pay to check.