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  • Writer's pictureJuliet Weller

"Will That Be Cash or Credit?"

Some people are die-hard users of one or the other. I don't typically carry cash, mostly because I rarely need it and therefore rarely carry a purse. When traveling I do try to have some on me, both during the travel process and in-destination. However, gone are the days of traveler’s cheques (we don't even spell the word that way anymore in the US) and having to find a convenient place to cash them when you run out of money in a foreign country. Today, there are more ways than ever to make sure you always have foreign cash handy when exploring. Here is a short guide to obtaining and dealing with foreign currency on your next vacation.

1. ATMs – By far the easiest and smartest way to access cash while abroad is to use an Automated Teller Machine (ATM). The conversion rate is usually the best available; proceed with reasonable caution, as you would at home. Be sure that the ATM is located in a well-lit secure area (preferably inside the front door of a bank) and be sure no one can see you type in your PIN number. Put your card in and choose “English” as the language option, then proceed as you usually do; remember you are withdrawing foreign currency so be mindful of the exchange rate. Your account will be debited for the equivalent in US dollars. Most Europeans don’t call them ATM’s; by the way…look for “Bankomat” or “Cash Point”, sometimes a “Distributeur” in France. In Mexico, 'Cajero'. You won't have any problem knowing one when you see one.

There are “stand alone” ATMs in many tourist areas that are NOT related to a banking institution, but these tend to charge higher transaction fees, have lower exchange rates and may be less secure. Always stick with a well-known name. Check with your local bank before you leave to see if they have any agreements with foreign banks in the country you are visiting to minimize transaction fees, and be sure to let them know that you are going to be using your ATM card in foreign countries, so they won’t put a security “Hold” on your card when you withdraw cash in Prague. I'll remind you of this in the pre-departure email I send you, but you don't have to wait for that to take are of this important task.

2. Your Home Bank – Your local US bank can order you some foreign currency before you ever leave home. The exchange rate is often not as good as using the ATMs in-country, so I limit it to just the amount I think I need to get started with; Enough to cover a taxi and some food until I can find a local cash machine. Be sure to give your bank a few days to order the foreign currency!

3. Currency Exchange bureaus – These should always be your last resort, especially the ones located in airports, train stations and highly touristy areas. Rates and fees are very unfavorable. The only time I recommend a change bureau is if you have several different kinds of currency that you want to combine into one (for example, you have British Pounds, US Dollars and Norwegian Kroner that you want to convert all into Euro at once). Just be prepared to be hit with a substantial fee.

4. Credit Cards – If you plan to make major purchases while abroad, you’re almost always better off putting it on a credit card that can give you certain protections – especially if the merchant is going to ship the item to you back home in the US. By now you probably have a credit card that has the “chip” embedded, instead of just the magnetic stripe on the back. These are more commonly used in Europe and you might have trouble using a non-chipped card for some purchases, especially gas stations and restaurants. Sometimes the merchant will ask if you want your purchase to be in local currency or US dollars…ALWAYS CHOOSE LOCAL CURRENCY! If you ask for the charge to be made in dollars, you will usually be hit with an extremely unfavorable exchange rate. There are lots of credit cards out there that don’t charge international transaction fees, so do your homework before you travel.

5. Carry small bills for tipping. Don't expect change back when you're tipping a driver; this is true even if you're traveling in the US. If you are staying at an all-inclusive resort, tipping is still customary. If you are overseas it is rude to expect a waiter to be happy to receive your George Washingtons. He or she will have to go to a bank and exchange your dollars at whatever is the going rate. The cash he receives may not reflect the level of service you were given or the reward you intended. Service people who work for tips labor long and hard; having to make a trip to the bank to cash the few US dollars you gave them is probably not without unfriendly mutterings beneath the breath.

Europe is much more of a cash society than the US. Do not use your debit or credit card for a 2 Euro cup of coffee or simple meal in a sidewalk cafe. Save your credit card for your hotel stays, a fine dining restaurant experience, shopping or large souvenir purchases. Using cash just makes more sense….and you don’t have those huge credit card bills waiting for you at home when you return.

With just a little planning and knowledge, you can ensure that your trip is as rewarding financially as it is personally. Let’s get packing!

'til next week.


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