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Why I Never Exchange Currency Before I Go Abroad

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As I write this blog post, I’m preparing to board a plane from Indianapolis to Washington D.C. After a few hours in the nation’s capital (hopefully spent in the Turkish Airlines Lounge with my Priority Pass membership) I’ll head to my United Polaris business class seat for a flight to Brussels, Belgium before completing my final stretch from Brussels to Nantes, France.

I’ll spend time in both the UK and France during this trip, so I should theoretically plan on using some Euros and British Pounds. The thing is, I have exactly zero dollars in international currency in my possession. While a lot of people prefer to exchange currency at their local bank before an overseas trip, I don’t typically bother.

Here’s why I don’t exchange currency before I head to Europe or elsewhere around the globe:

Exchanging money at home is a losing proposition.

First things first: You absolutely can exchange most currencies with your bank at home if you provide them with enough notice, but doing so is rarely that great of a deal. Banks tack on fees that can vary widely, but they are almost always going to charge more than getting currency elsewhere.

You can also consider getting money through Travelex, a currency exchange storefront that operates within airports. However, their exchange rates are usually the worst. A Consumer Reports study from last year showed that Travelex was exchanging one euro for $1.26, whereas Mastercard was exchanging 1 euro for $1.17 the same day.

I prefer to use my rewards and travel credit cards to earn points and miles on all my spending.

The main reason I don’t exchange currency is the fact that I don’t use a lot of it. No matter where I’m traveling, I typically put all my expenses on my favorite travel credit card with no foreign transaction fees.

While I alternate cards regularly, one of my tried and true favorites for international purchases is my Chase Sapphire Reserve card. That’s because it offers 3x points on travel and dining, which encompasses most of my overseas spending anyway.

It’s cheaper to get money out of an ATM when you arrive.

I typically do get some cash when I arrive in a new destination — mostly so I have spending money in case I want to buy something from a smaller vendor. However, I always get cash from an ATM when I arrive at my destination. I do it this way because ATMs tend to offer a better exchange rate — even when accounting for out-of-network ATM fees.

If you don’t want to pay any ATM fees, you can go the extra mile and sign up for an account that waives them or reimburses them. Many frequent travelers swear by the Schwab Bank High Yield Investor Checking Account, which offers a debit card with no monthly fees or account minimums and unlimited ATM fee rebates worldwide. You’re required to have a Schwab brokerage account in order to apply.

Do you exchange currency before you travel? Why or why not?

 

[Image Source: Shutterstock]

Holly Johnson
Holly Johnson is a financial expert and award-winning writer whose obsession with frugality, budgeting, and travel plays a central role in her work. In addition to serving as Contributing Editor for The Simple Dollar, Holly writes for inspiring…
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