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Where Should I Exchange Currency for an International Trip?

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TPG reader Scott sent me a tweet to ask about getting cash for international trips:

“I’m heading to Chile and Argentina soon, and wondering what’s the best strategy for exchanging money? Should I do it at the airport (here or there), or should I find an ATM once I’m on the ground?”

I’m all for maximizing travel, but when it comes to currency exchange, I don’t think going far out of your way to track down the best rate is worth the effort. That’s not to say the rates are all the same — you’ll likely pay more to change money at an airport or train station than you will elsewhere. It’s more because the amount of cash you need is typically small enough that the difference in exchange rates doesn’t matter.

In most popular destinations, you can (and should) use a credit card as payment. That saves you from having to carry larger amounts of cash, and more importantly, it allows you to earn rewards for your purchases. Just be sure to use a card that doesn’t charge foreign transaction fees, and avoid dynamic currency conversion whenever it’s offered.

It’s still a good idea to have some local currency on you, but unless you need more than a few hundred dollars, it’s worth paying an extra one or two percent for the convenience of withdrawing from an ATM as needed. Avoid using a credit card to withdraw funds, because you’ll get hit with cash advance fees. Instead, get a debit card that doesn’t charge for out-of-network transactions, or look for a bank account that reimburses ATM fees. In a pinch, you can also try paying with American money, since smaller businesses may choose to accept it in order to make a sale.

If you’re headed somewhere where credit cards and ATMs are less reliable, or if you expect to need a larger amount of cash, then it makes sense to track down a better rate. When possible, your best bet may be to change currency through your bank or credit union before you depart. Any reputable financial institution will be able to tell you the approximate exchange rate up front, so there shouldn’t be any surprises.

Charter flights from LA to Havana on American Airlines start in December. (Photo courtesy of Bryan Ledgard via Flickr.)
You’re more likely to need cash in destinations like Cuba, where payment networks aren’t as reliable. Image courtesy of Bryan Ledgard via Flickr.

If you come home with foreign currency that you might be able to use in the future, then resist the temptation to change it back into US dollars. Exchange rates do fluctuate, and there’s some risk that your leftover money will be devalued, but of course it could just as easily increase in value. Either way, you’ll probably come out ahead by letting that cash sit in a drawer until your next trip rather than paying fees to convert it twice.

For more on currency exchange and maximizing international purchases, check out these posts:

If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.

Featured image courtesy of Shutterstock.

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