Should I get Local Currency?
Many travelers ask if they should get local currency before they leave the US. In my
experience, I’ve found it’s a good idea to have at least $100.00 worth of currency for
the country you are visiting for those occasions when credit cards are not accepted.
For many outdoor markets, local taxi services, smaller hotels, and small-town
restaurants, local currency is oftentimes your only option.
When making larger purchases, a credit card may seem like the best choice, but you
will almost always get a better “offer” if you pay with the local currency. Plus, if you
are paying with a credit card both you and the merchant incur fees. Depending on
your credit card provider, you may be charged an international fee per transaction
in addition to interest charges. The merchant will generally incur a 3-4% fee of the
total transaction. That’s why it may be preferential for smaller merchants to offer
you a cash discount rather than pay the high credit card fees.
Most banks will charge a premium of 3-4% in addition to the international exchange
rate when exchanging dollars to international currency. Then, they will charge the
same premium again when you exchange the currency back to U.S. dollars when you
return home. To avoid all these fees, once you arrive in the country you are visiting,
make a cash withdrawal directly from a local ATM. ATM’s will offer you the most up-
to-date rate of exchange, as rates change daily, and you will always receive the local
As ATM’s seem like the best option, sometimes they run out of money. Don’t be
alarmed if you try to make a withdrawal and get a message that your card is not
valid. The first time I got this message, I spent a good amount of time on an
international call with my bank, that assured me my account had not been
compromised, and I should try making the same transaction at a different ATM.
If you must use a currency exchange booth, be sure to inquire about all the fees and
take the time to read the small print, as once the transaction is signed, the fees are
non-refundable. There is almost always an additional 10-25% fee included in
addition to the listed exchange rates. While at an exchange booth in Italy we were
given the exchange rate of $200.00 for €80.00 after all the fees were tacked on. We
were able to recover all but $20.00 only because we put up a really good fight.
Other Things To Consider Before Traveling:
- Notify your banks and credit card companies that you will be traveling
internationally, and give them the list of countries on your itinerary.
- Check to see if they offer a travel debit card that allows you the option of
carrying a smaller balance in case your card gets lost or stolen.
- Ask about your credit card company’s policies regarding fees on
- As most banks and credit card companies charge a transaction fee each time
you withdraw cash, request the maximum amount allowed per day to incur the least amount of fees. Also, check to see if they consider Friday through Sunday as one day’s worth of transactions instead of three days.