The cost-effective ways to access cash abroad.
The world is going cashless; some countries (ex: Sweden, Norway) already largely are. Where travelers once saw “cash only” signs, there are now “cash not accepted” warnings.
Still, in some places cash remains king (German cafes and street markets in Laos, here’s looking at you), plus paying in cash instead of by card can till net you a bargain (let’s hear it for buying rugs in Oman and Turkey).
Of course you don’t want to overpay for your bills and coins. Here’s how to take money out abroad at the best exchange rate.
First, two cautions:
Avoid exchanging cash at the airport.
The airport is not the best place to take out money; those inviting booths are ripping you off.
Airport currency exchange businesses dangle great customer bait, with “real time” currency tickers like the stock market and signs proclaiming “no commission” or no fee. Even if either are true (they’re usually not), you’re not getting anywhere near the best rate of exchange. In fact, you’ll get around 10% less cash than the going exchange rate, on average. These airport services, much like “currency exchange” stores in tourist areas, give you a consumer rate of exchange rather than the actual bank exchange rate. For example, while the British Pound is currently worth around $1.32 USD via bank rate, you’d end up getting around $1.22 for each pound you exchange through one of these consumer currency exchange stores, or worse.
Google is a great way to get instant currency exchange ballpark rates. Search, for example, “1 GBP to USD”, or “500 INR to HKD” to see roughly how much you should be getting for any amount.
Don’t exchange too much.
Taking out “too much” money abroad increases the likelihood you’ll end up getting hit with bad exchange rates or fees at the end of your trip when you get rid of the soon to be useless cash. If you do take out too much, instead of converting it, spend it on something good. (I’ve been known to blow a last few bills on chocolate at the airport). In some countries, you can load it onto your (US) Starbucks card.
The best ways to take out foreign currency:
Technology and competitive banking has transformed the landscape for taking out cash abroad, plus new apps are advancing things even further. Currently, the best ways to take out money abroad are:
-Visit your bank at least 10 days before travel and make an exchange.
-Use your debit card to make one large (if your bank charged fees; otherwise, take out cash as you need it) withdrawal at your destination.
-Load money onto a new style of international payment app without ATM fees.
Visit your bank before you go.
Many banks are happy to arrange foreign currency for you for no or minimal fee. By going through your bank, you’ll get the more competitive bank rate of exchange, which will give you more for each buck you exchange.
Note: Plan for your currency to arrive in 7-10 business days.
Use your debit card.
Inform your bank of your travels in advance, then withdraw local currency with your debit card at your destination. You’ll get the bank rate of exchange, and taking out a sum in a single withdrawal means you only get hit with one ATM fee, if any. (Most credit unions allow no-fee overseas withdrawals.) Even if you incur a withdrawal fee, it will be less than the commission charged by an airport or tourist-area service.
Note: Always confirm any fee before going through with a transaction.
Use one of the new money apps.
New apps and banking products are emerging nearly every month that allow you to withdraw funds abroad with no fee. Check out Monese, Charles Schwab (US), Revolut, Starling Bank (UK), and Curve, for starters.
Twist’s Take: Follow this advice to save money when accessing cash abroad.
