Foreign Currencies: Know what you're spending
|Planning a trip abroad, here's some tips about foreign currencies and credits cards. In Europe, euros are the currency for many countries, but remember pounds in the UK, koruna in Czech Republic, etc. With foreign currencies, it's important to figure costs in the local currency, so there are no surprises.|
|Wondering why you need cash? Taking taxis, buying a crepe on the street in Paris, or blinis in St. Petersburg, shopping at a farmer's market in Sonoma, buying hand-blown glasses in Venice, don't assume you can always whip out a credit or debit card. Food vendors and taxi drivers often expect cash. Also, away from big cities, for small purchases vendors typically operate on a cash basis.|
|Before you go|
|Exchange rates While planning your trip, check out the exchange rates for your destinations online. This gives you current information for what you should expect to get for your home currency when traveling.|
|ATM cards Your ATM card can be used in cash machines in foreign countries (English is available as a language).|
|Check at your bank so you know what fees are associated with using your card in ATM machines abroad. For example, each time we use our ATM card in a foreign country, our bank charges us a $5.00 foreign transaction fee.|
|Also in countries such as Thailand, fees at any ATM are higher than usual, so try to minimize frequency of withdrawals. In Japan, most ATM are not compatible with US bank cards, and you'll need to go to the post office.|
Credits cards in cash machines You can also use your credit card (with a PIN number) to get cash from ATM machines abroad. It's convenient, but once again, check on the fees and interest rate for each cash advance.
|Getting the local currency|
|At the airport It's useful to have local currency as soon as you land, so use the ATM machines or bank get cash at the airport.|
|ATM machines In large cities, you'll find ATM machines are very convenient. However, there may be limits as to how much you can withdraw. If you try to withdraw more than the limit (e.g. 250 euros), this may result in a "request refused," even when there is enough money in your account. If so, just lower the amount to withdraw, and see if that works.|
|Understand the Costs|
Foreign transaction fees on credit cards Some credit card companies charge "foreign transaction fees" for a foreign currency billing on your card. This fee can be anywhere from 1% - 3%. For a large expenditure, such as a hotel bill, it can be a chunk of change. So, before you go, check your credit card policy to find out about fees, so there aren't any nasty surprises when you get your credit card bill.
Using credit cards at ATMS Using your credit card at ATM machines to get cash is probably the worse option. Each time you go to the cash machine, there's likely to be the per transaction fee, plus the percentage (1% - 3%) fee.
|Budgeting Tip: One friend we have always "deposits" a percentage of her traveling budget on her credit card. That way, she’s not faced by a humongous credit card bill when she gets home and she has no worries about going over her credit card limit while traveling.|