Exchanging Money in a Foreign Country

If you are planning a vacation somewhere out of the country, you maybe be curious about how you go about exchanging money. Money exchange in foreign countries can be a difficult thing to do, if you are not aware of all the pitfalls one can encounter. The first and most common pitfall would be not having the correct currency to pay for travel and transportation expenses when you arrive in your destination. Exchange a small amount of money prior to leaving to cover these expenses. Do not exchange a lot however because exchanging money in your home country can be quite expensive.

Once you are in the destination country, you can exchange by using an ATM. These usually offer the best exchange rate and you can be sure that it will not rip you off. Most banks will charge a convenience fee and these can add up. Withdraw a good sum of money in order to avoid these fees. You can also call your bank prior to leaving for your vacation to find out what the convenience fee is.

Many people believe in carrying Travelers Checks. These are a good idea for one reason; if they are lost then they can be replaced. Unfortunately, traveler's checks are put to better use at home. Abroad, traveler's checks can get a very bad exchange rate and if you are going to a less developed area, there may not be a place to exchange the traveler's checks. If you do carry cash, check the year. Some countries will not accept bills that are older than 1991. When you go to exchange your cash, exchange a large amount. Banks in foreign countries will operate on a different schedule than what you are used to. Therefore, they may not be open when you need them to be. Always get a receipt if a problem should arise later, and ask for small bills. Small bills will be helpful for tips and if you do venture into a less developed area, you'll have a better chance at spending it. Some areas simply do not have the money to break a large bill.

Do not plan on using a credit or debit card for all of your purchases, even if credit card companies do offer a good exchange rate. Credit and debit cards are only accepted in well developed areas and if you do use one make sure you know the exchange rate prior to purchasing. Be sure to keep your credit card receipt until you get home and can check your bill. It is not uncommon to have duplicate charges. Always advise your credit card and/or bank that you are traveling abroad. Sometimes credit card companies and banks will freeze an account if there are several strange out of country charges.

The last and easiest tip to follow is to never, ever exchange money on the street. Locals may try to entice you with a higher exchange rate than banks but really they are just trying to scam you. These locals who try to exchange on the street will either try to pick pocket you, exchange with a foreign currency other than the country you are in, or con you with some other type of unethical scam. It's a dangerous method to exchange your money and it is simply not worth it.

Hopefully with a little planning and wise choice you can avoid the many money exchange pitfalls that international travelers fall victim to everyday, and instead enjoy a nice vacation in a place you've never been.