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Traveling abroad typically means having to pay with a different currency. When it comes to converting your cash and carrying it with you, there are a few important things to consider that could save you a lot of money on your travels. Below are just 10 tips on how to use foreign currencies while traveling.
Research the exchange rate
Looking up the exchange rate is always important when going to another country that uses a different currency. By converting prices back to US dollars, you can work out whether you’re getting a relatively good deal or not.
For example, is JP¥ 320 (Japanese Yen) a good price for a coffee? Without converting it back to dollars you may not know (it’s just under $2.50 in case you were wondering). Online conversion tools are a quick way to convert prices so that you know exactly what you’re spending.
It’s worth noting that exchange rates are constantly changing. When deciding whether to go abroad, it can sometimes be worth checking whether a foreign currency is falling or rising in value against the dollar. If it’s falling, it could be a good time to travel. If it’s rising, expect to pay more for your trip than you may have budgeted for.
Determine whether it’s a cash or card culture
Some countries pay predominantly with cash, whereas others are very card-oriented. This can be worth looking up before you travel so that you know the best way to carry your money – you don’t want to be constantly rejected for trying to pay by card or cash.
A few examples of countries that are largely reliant on cash include Morocco, Philippines, Nigeria and Vietnam. Countries like Norway and Finland are meanwhile almost cashless. This post offers more information on card and cash culture around the world.
Know when to convert cash beforehand
In some countries, it’s better to wait until you arrive to convert your cash. In other cases, you may get a better exchange rate by converting beforehand.
Generally, it’s better to convert cash when you arrive if it’s a less widely used currency like Sri Lankan rupees or Ethiopian Birr. Stronger and more widely used currencies like Euros, British Pounds and Japanese Yen are easier to get hold of in the US and therefore you can get a good rate for them when buying before you set off.
Stash your cash securely
When carrying cash, be careful as to where you store it. If you’re staying in a hotel room that is cleaned throughout the day, don’t leave your cash lying around – it’s better to hide it or store it in the hotel room safe. Another option is to keep cash in your suitcase and keep your suitcase locked.
If you’re backpacking, you need to be much more careful as to where you put your cash. Don’t keep it in pockets on your pants or bag where it could easily pickpocketed without you knowing. Fanny packs keep your cash at the front of you where it’s easier to take, however you may still not want to put all of your cash here just in case. In fact, it’s often a good idea to stash cash in different places so that if you do lose some, you won’t lose it all. This guide offers more tips for keeping cash safe while traveling.
Take care using ATMs
Using ATMs to withdraw cash when you need it can prevent you from having to carry lots of cash on you. However, ATMs have their drawbacks. You’ll pay a currency transfer fee if you’re using your card – plus some ATMs may charge an extra withdrawal fee (something to avoid if you can). Therefore you should try not to use them too frequently.
There have also been scams in many countries involving ATMs in which people’s card details have been stolen and money has been drained from their accounts. Some thieves may also hang around ATMs and prey on tourists. You can usually protect yourself by only using ATMs located inside banks.
Look into prepaid travel cards
Prepaid travel cards are cards that allow you to store a set amount of foreign currency on them. You can use them just like a debit card and you don’t have to pay any transfer fees. They are recommended in countries that heavily use card payments.
Prepaid travel cards also have the advantage of allowing you to lock in a good exchange rate early if you’re worried the currency rate may change. Paying using a US credit or debit card puts you at risk of paying more if the US dollar falls in value against the foreign currency while you are traveling – which is something to consider when traveling around big political events.
Use a credit card with international perks
Many US credit cards have international perks that can allow you to reduce costs when using them abroad. Some don’t require you to pay a foreign transaction fee and even provide rewards if you spend them on services like flights or hotels.
This guide lists some of the best credit cards to use abroad. Just be wary that credit cards may not be widely accepted in some countries.
Explore the option of cryptocurrency
In some places around the world, it may be possible to pay via cryptocurrency for certain products and services. Cryptocurrencies like Bitcoin are accepted in many countries and can prevent you from having to pay currency exchange fees. There are many online guides where you’ll find cryptocurrencies such as Bitcoin explained.
You can pay in Bitcoin via a mobile payment app. Burger King and KFC are some of the fast food restaurants that have started accepting Bitcoin (although not in every country).
Take care traveling around elections
Various world events can influence exchange rates – some of which cannot be predicted. National elections are one example. US elections can have a big impact on the value of the US dollar. Similarly the currencies of other countries can be affected by local elections.
If you want to avoid potentially paying more than you expected due to an election, consider taking out cash in advance or putting foreign currency on a prepaid card. Alternatively, plan to travel a couple months after the election.
Pay in advance to lock in a good exchange rate
You can also pay for things like museum passes, public transport passes, theme park tickets and other things in advance in order to lock in a good exchange rate. This also has benefits such as not having to queue for tickets when you arrive, as well as making sure that there is availability (certain tours may need to be booked in advance as places may fill up quickly).