There are so many options to get foreign cash that it can be confusing. Chris wants to know the best and cheapest way to exchange U.S. dollars.
With much ado:
I’m looking for the best way to get foreign cash (in our case, Euros). I was hoping to see if it’s ultimately less expensive to get cash while at home before, exchange cash on the trip, use ATMs, or (god forbid) cash traveler’s checks. Does anybody use traveler’s checks anymore?
The best way to get foreign cash is to grab the cash when you finally make it there. Banks at home will almost try to rip you off as much as they can and you will almost always find the best exchange rates at your destination. (In fact, there’s a black market for U.S. dollars in some countries. Coughargentinacough.)
That said, if you choose to exchange money the traditional way, please do not exchange money at the airport. The airport often has the worst rates but it’s so convenient that I understand why a lot of people do it. I usually only try to exchange just enough money to get to the hotel and some, in case I want to grab a bite of food later. It’s later when I’m in town I usually try to exchange money at a local bank or exchange vendor for a usually much better rate. Shopping around for the best rate is key and, more often than not, lots of the exchange vendors will be clustered around each other. Though this can vary depending on locale—there are always exceptions—this principle generally holds up pretty well.
But to tell you the truth, it’s been a long time since I exchanged money with someone behind a plastic divider. Withdrawing money from any bank ATM is usually not only much efficient, but cheaper. Besides, I’ve yet to see a place where an airport that doesn’t have an ATM onsite. It’s also nice, because this method keeps you from carrying around druglord-sized amounts of cash in your bag.
Unfortunately, you’ve got to keep in mind who you bank with. Depending on the institution, you could possibly get slapped with a transaction fee (up to $5) and a foreign transaction fee (about 3% of the total amount) per transaction. This doesn’t stop some people I know — the general principle in this case is to pull large amounts at a time to minimize the number of transaction fees you get slapped with. Obviously, the more frequent the withdrawals, the more expensive it will be. Your bank will be happy, but your wallet won’t be. Regardless, this sometimes still works out to a comparable rate examined against the traditional method.
On the bright side, some banks like Bank of America are exempt from this through the Global ATM alliance and the best ones like Charles Schwab will refund any fees incurred worldwide. Just make sure to enquire about foreign transaction fees and ATM fees with any bank you have a checking account with. In particular, I’ve grown quite fond of the Schwab account — it’s grown particularly useful even at home!
And yes, no one uses traveler’s checks anymore. If anyone reading this is still using traveler’s checks, I urge you to stop. Before you hurt someone.