Travel Tip: Exchanging Money Abroad

The US Dollar is worth a lot less than it used to be in most foreign countries. Here are some common mistakes many travelers make:

Buying travelers cheques
Travelers cheques do have one big advantage -- if you lose them, they can be fairly easily replaced. But you can often get gouged when changing them to local currency. If you want to bring travelers cheques, get them issued here in the US in the local currency if you can get it commission free (usually available to American Express cardholders). You can then change them at any local bank with your passport for no charge.

Changing your dollars in the airport or at your hotel
You should actually never do this. Ever. You should only do this at the airport if you need a little bit of cash for transportation.

Instead, here are some better options to stretch your dollars.

Use a credit card with a low foreign exchange fee.
There's been an antitrust settlement against the credit card companies for cheating consumers on these fees, which charge you for using your credit card abroad. If you travel abroad or buy in foreign currencies frequently, consider getting a card with a very low fee (some are as low as 0%). Take a look at this compiled list of frequently updated information on foreign exchange fees for credit cards.

For cash, always withdraw from an ATM machine.
ATM machines will withdraw from your bank account without a ridiculous commission. Airports almost always have reputable bank ATM's for you to make your withdrawal. Be sure to check if your bank has a international ATM fee -- many brick-and-mortar banks have them, while many internet banks are fee-free. Here is some more info on what banks are charging.

Be sure to notify your credit card issuer if you are going to be visiting lots of different places, since they might start declining charges out of fear you've had your card stolen.

Taking little steps like these could save you hundreds of dollars that you didn't even know you were spending. Use that money to enjoy your travels, rather than giving it away to bank commissions.