Well, I am about to wind down my trip to China, but I thought I would offer a Friday financial tip for those people traveling abroad. Most of this information is probably quite familiar to people who travel abroad, but for some of my students and other people going overseas for the first time (or just to Mexico or Canada) this information might be useful.
In reality, I am going to point you to an excellent post by Ali from the Anything You Want blog. Ali has a great post on accessing money abroad. I would highlight a couple of things, however.
1) The best way to get money abroad, in my opinion, is ATMs. ATMs always give you a much better exchange rate than those currency exchange places you find in the airport. In fact, you can often get 10% more from an ATM. When you get off the airplane most major airports will have an ATM that you can use right away. If you are in a major city, banks are everywhere and as long as you have your debit card with that little VISA logo you should be fine. And resorts will have ATMs because they, of course, want you to spend as much money as you can.
2) That said I do try to bring about $100-$200 of local currency along before I leave. I fully admit i sometimes get this at the airport. I try to go to a major bank, but sometimes it doesn’t work. And if you aren’t a customer of that bank it can sometimes be a hassle (e.g. Bank of America). Most credit unions and the like won’t have foreign currency. So if you live near a major city and are have an account at a major American bank (e.g. Wells Fargo, BofA, etc) you should be able to get most major currencies if you go to large branches. You can often find these in the financial districts of your city. If not, no worries, maybe just bring a couple hundred bucks with you to the airport and exchange it at the airport. We are only talking about losing a little bit on their exchange rate. If you are wanting to get hundreds/thousands of dollars. Do it in the states or even better ATMs in the country you are visiting.
3) Also, try to make only one or two visits to the ATM. I think it is better to take out more money just in case. Maybe you only take what you need with you during the day and then stash the rest in a safe in your hotel room or in luggage or whatever. The less transactions you make the less you have to pay in exchange fees.
4) If you can, get a debit and/or credit card with the chip in it. It just makes it easier when traveling to Europe or other places. Most places don’t do the magnetic strip like in the U.S. and using your credit card can be a pain. Recently, I had my BofA card replaced and to my surprise it was a chip card, which is great. I am not trying to get the same from my other debit and credit cards. They may not have them, but it could be good for you.
5) If you are traveling abroad a lot I would recommend that, even though I don’t like them, get a credit card with no foreign exchange fees. There are a number of cards that don’t have annual fees where you can no transaction fees abroad. It just can just save you time, hassle, and lots of money. Considering each transaction with a card can incur a fee of up to 3%. That can add up to a lot of money when you travel abroad. Here is a list of those cards. I personally have the Capital One Venture Travel Card, but only use it when I travel. Other than that I never use it.
6) Make sure you tell your bank and credit cards that you are traveling abroad. If not it could mean trouble. I did have this problem once and it was a minor one, but it did prevent me from buying a small gift. Make sure they know. Just call them up and let them know when you are traveling.
7) Try to carry more than one card with you. I do have multiple credit cards that are open, but I only use one for expenses and then pay it off. I also have two bank cards. I ALWAYS make sure that I keep one card in one pocket, another card in another, and potentially leave a third or more in your luggage. You never know when you might lose your card, be pickpocketed, one doesn’t work. So far I have never had anything stolen from me, but I make sure that I always have a credit card with me in my front pocket just in case. Even if I am just running out for dinner. It has saved me on more than one occasion.
8) When you are coming back from your trip, if you have a chance, try to go to a local bank and get American dollars from the local currency. Your exchange rates will be so much better than the airport. I have watched some people lose almost $100 when they tried to do the exchange at the airport instead of finding a local bank to change their money back. Some countries have restrictions on how much money you can do per bank or per day. In China, the amount of money that you can get from a bank per day is $500. We got reimbursed some money we spent here so today I went and turned that local currency into dollars. And the exchange rate is still much better than what I would get at the airport or at home.
9) Finally, if you are traveling home try to keep just a little bit of local currency on you until you get to the airport. Again, you never know what will happen. Currently, I have about $80 for the next 24 hours. But that should be plenty of money for a cab, dinner, and lunch today and tomorrow and the trip home.
Hope you have some safe travels. Check out Ali’s blog and post. It is a good one