If you stick to the local currency and allow your credit card to make the conversion instead, you’ll benefit from your issuer’s negotiated exchange rate, which is almost always better.Ī new crop of financial apps-Wise, Revolut, and N26 are among the most popular-can be a great alternative if you are frequently abroad, or an expat who doesn’t want to set up a bank account in your new home. This is because the rate assessed by the business at the point of sale is generated by Dynamic Currency Conversion, or DCC, an added service that is offered out of convenience but paid for by a less beneficial exchange rate. Sometimes when vendors swipe your card, they will ask you whether you’d like to make your purchase in the local currency or in your home currency. Unlike currency exchange kiosks, credit card companies do so much business that they can make profits through other mechanisms. The big credit networks like Mastercard and Visa have the power to negotiate their own exchange rates that are almost always appealing enough to rely on. If you can avoid foreign transaction fees, however, your credit card is likely to offer a competitive exchange rate. And the worst offenders might even phrase the surcharge as something like “$1 or 3%, whichever is greater,” which could result in getting hit for an extra $1 every time you buy something as trivial as a candy bar. But cards that do carry the fees, can cost you-typically 1% to 3% for every transaction. And most top travel credit cards also skip them. A few big issuers-including Capital One and Discover-have eliminated these altogether. There is a big catch: First you need to find out if the credit card you use levies foreign transaction fees. If you have the right credit card, another great option can be to simply swipe your plastic, much like you do at home. If you only want to withdraw, say, €100, you can typically enter a lower number. ATMs recognize foreign cards and typically offer higher increments, often starting as high as €200, perhaps for your convenience, but also because fees they earn tend to be percentage-based. While you’re asking about your bank’s international partnerships, tell it about your dates of travel, too, “so a transaction isn’t flagged as potentially fraudulent,” says the ABA’s Edrington.ĭon’t settle for the high default cash amounts suggested by the machine, either. Those include Charles Schwab Bank, Fidelity’s Cash Management account, and LendingClub, but there are others. branches-simply waive or refund transaction fees, no matter which ATM you choose, even if there’s a fee charged by the ATM’s owner and instead of by a bank. Large banks that operate globally are more likely to extend no-fee courtesies to account holders worldwide than small regional banks are. to BNL D’Italia in Italy to Scotiabank throughout Canada and the Caribbean. Bank of America partners internationally in the Global ATM Alliance, which includes roughly 50,000 fee-free machines at various local banks, from Barclays in the U.K. For example, Citibank allows customers fee-free use of its ATMs in 20 countries. Your best chance to get money at a great exchange rate, with no extra fees, is to draw cash from your account through an ATM operated by your own bank or its partners. “Once you’re abroad, you’ll get a much more favorable rate using your bank’s ATM rather than at an airport exchange kiosk,” says Jim Edrington, chief member engagement officer of the American Bankers Association. There are lots of options for converting your money to a foreign currency, but the easiest and most economical one is probably already in your wallet. Here are the best ways to get advantageous exchange rates, listed from best to worst, according to established personal finance experts from the banking, government, and consumer worlds. Over the course of a week of spending, especially if you purchase clothes or an elegant restaurant meal, those differences can add up to hundreds of dollars. On a day when currency markets suggest $100 should buy you €93, a currency exchange desk might hand you just €81, while a more modern method would net you a rate closer to €92, assuming you can avoid other fees. How much is at stake? Take dollars to euros. Whether it’s using an ATM affiliated with your home bank, or simply swiping your credit card, new methods offer better convenience and lower fees. Finding the best way to change money is an age-old problem for travelers, but the smartest methods for doing it have evolved dramatically in recent years.Ĭurrency exchange used to be as simple as dropping by a money-changing kiosk in a train station or a tourism hub upon your arrival in a new country, but new digital tools have made those old methods inefficient and pitfall-prone by comparison.
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