Let’s Talk Money

Some of the most practical questions I’ve been asked about traveling are what to bring in terms of money and credit cards and how to operate in the local currency. Doing a little research ahead of time will ensure your travel to go a little bit smoother and worry free!

Money 101

The first time I traveled to Europe, I can recall bringing Travelers Checks…while people still may do this; it is much more common for travelers to withdrawal local money from ATMs and use credit cards where possible.

It is true that Europe operates on a cash basis much more than we Americans do so it’s a good idea to contact your bank and inquire of all ATM fees. They can also tell you their banking affiliates abroad and in some cases waive the transaction fees at least on one end. Hey, it can’t hurt to ask, right?!  ATMs are the easiest way to pull out local currency (using the interbank exchange rate, i.e.  best exchange rate) but because of these transaction fees, it’s a good idea to estimate how much you will need during your time spent in the foreign country so that you’re not spending 10 on bank fees for 20 worth of cash….

You can also get cash at foreign banks which should not charge you a transaction fee if you are exchanging your USD on hand. Some banks have given me trouble with this, others have not.

Another way to get the local currency is to go to your local Bank at least 6 weeks in advance of your trip and have your bank order the foreign currency for you. Some banks charge a fee to do this and don’t necessarily offer the best exchange rates.

Avoid exchanging money at a Currency Exchange window / Exchange Bureau found around touristy areas. They charge an arm and a leg to exchange money that I don’t know how it’s not considered robbery. The exchange rate may seem reasonable, but the transaction fee is NOT.   Resist the temptation!

Now, what to do with all those left over foreign bills and coins? US Banks will exchange your foreign currency for USD, but again, with an exchange rate that may not be the best and possibly with a small fee.  For an amount of cash remaining that isn’t terribly significant, you can exchange those bills in the airport prior to your departure. These kiosks at the airport will also take back your 1 and 2 Euro coins but it should be noted that there is absolutely no place in the US (that we have found, and trust me, we’ve looked!) that will take back foreign coins. So be cognizant of spending those in your last few days of your trip or exchanging them at a foreign bank for paper bills.

The Low Down on Credit Cards

When I finally grew up from travelers checks and started using my own credit card, I picked Capital One because at the time they were the ONLY credit card company not charging a transaction fee on purchases in a foreign currency.  I probably will forever be loyal to them for this reason but now, other credit card companies have adopted this policy. It’s important for you to call your credit card company before you go and inquire if your particular credit card will be charged these transaction fees. Otherwise, you risk a nice big unexpected surprise on your next credit card bill…. A souvenir you don’t want… Check out this list of credit cards that are not charging foreign transaction fees.

Now, you’ll find that most places accept the chip & pin credit cards which most American credit card companies haven’t adopted yet. Citi, Bank of America and Chase have just started offering dual cards with chip and magnetic strip.  But know that you do not have to go out and get one of these cards if you don’t have one.  The machine used by vendors for the chip and pen cards is the same for the magnetic strip cards and many times I’ve had to show the vendor how to scan my US credit card….

credit card with chip

credit card with chip

Chip & Pin Card

Chip & Pin Card

This is how you use american cards in the vendor card scanners

This is how you use american cards in the vendor card scanners


You will also want to let your credit card company know which dates you will be abroad so that they can note it in your file. Next to being pick pocketed, having your credit card company freeze your account because your purchases have tripped a fraud alert could dampen your travel experience pretty quickly. For this reason, I always have at least two credit cards on me.

One of the best benefits of using a credit card is that purchases are exchanged using the interbank exchange rate, usually the best offered rate.   With that said, many merchants abroad have the ability to charge your credit card in the foreign currency or in USD, if you choose foreign currency, you may get charged up to 5% from the merchant’s processing machine for the currency exchange. For this reason, I find it’s best to make charges in USD to avoid these unknown/avoidable fees.

With all this said, it’s always a good idea to ask before you shop/eat if credit cards are accepted. IF you find yourself in a pickle and don’t have cash on you after enjoying a savory dinner, no fear, your waiter/waitress will direct you to the nearest ATM to pull out cash without any problems.

Taxi cabs will gladly take you by an ATM (while still running their meter) if you do not have cash on you but I find asking before getting in the car if they will accept a card will force them to commit to accepting them prior to causing a fuss at the end of your trip.

And last but certainly not least, as I mentioned in my pick pocketed blog post, be sure to write down all important phone numbers on the back of your cards to be stored in a safe place so that in the event you have a question, lose your card or it is stolen, you can quickly handle the situation with your bank.



2 thoughts on “Let’s Talk Money

  1. Great post, Kelley! I usually get cash in the foreign currency before I leave at an AMEX exchange location. They haven’t charged a high fee for it in the past and usually had a decent amount in stock. I always call before just to make sure.


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