We’ve made it to the second installment of my 3-part series on how to travel cheap. This article will be all about how to get the best currency exchange for travel, and the best ways to pay for things when abroad. If you haven’t read Part 1 yet, click here.

When I was first travelling abroad by myself, changing money for my trip was an afterthought. If I remembered, I would do it at the airport before I left but I often wouldn’t even do my currency exchange until I got to the new country and realised I had no cash. I know, I know, but I’m not exactly known for being organised.

Lately, though, I have been taking notice of currency exchange rates, and how they vary from place to place, and service to service. The currency exchange rate my bank uses when I pay by card is completely different to the rate on Google, which is different again to the rates used by currency exchange outlets. It’s all a lot more complicated and confusing than a lot of us care to think about. But with a bit of planning, you can actually save a lot of money in currency exchange.

So, now that I’m a seasoned traveller and I’ve tried every trick in the book to save money when paying for things abroad, it’s time for me to share some tips on how to get the best currency exchange for travel.

best currency exchange for travel

A few tips about currency exchange for travel

currency exchange for travel

fees involved in currency exchange for travel

There are two things to take into consideration when you are changing money: the fee and the exchange rate. So if you see something advertising “free currency exchange”, that doesn’t mean you won’t be losing any money. Be vigilant and check the exchange rate. You will need to compare the exchange rates and fees of different companies and find the cheapest rate. Then, you can take that rate to another company and they will often match or beat it.

How to calculate the exchange rate when you are buying things

Lots of people will just Google the current exchange rate, or look on XE. While this will give you an indication of how much the foreign currency is worth in your currency, it is not likely to reflect how much you are actually paying for it. That’s because the exchange rates quoted on these websites is usually the mid-market rate, so its not available to the general public.

The best way to figure out how much you are actually paying for something is to understand the exchange rate you pay. If you have exchanged money somewhere, look at the rate on the receipt. If you have paid by card, it should include the rate in the transaction details on your online banking. Once you’ve got the correct rate, make sure you take note of it in a handy place so you can refer to it when you need it. A big mistake a lot of people make – and I have done it too – is buying things abroad without understanding how much they cost. This can lead to spending a lot more money than you realise.

Best ways to pay abroad

The best currency exchange methods and methods of payments for travel that I have come across are listed below. Of course, if you have any other suggestions, feel free to leave it in the comments!

1. Currency exchange outlets

currency exchange store

Remember, the airport currency exchange stores have the advantage of having a constant stream of customers who have few other options. Even if you have different brands at the airport, they will often offer the same or similar rates to each other so that they can all benefit from a hefty profit. I have also come across dodgy tactics like not disclosing fees unless asked. They have a huge advantage over currency exchange outlets in other places, so they don’t feel the need to charge a good rate or be transparent. So, if you have the opportunity to compare rates and go somewhere else for your exchange, you will more than likely be better off.

Should you exchange money at home or in the destination country?

A common doubt is whether to change the money at home before you go, or in the destination country. There is no hard and fast rule, but for some reason rates seem to be better in developing countries than western countries, so if you’re travelling from a western country to somewhere else, they’ll probably give you a good rate to buy their currency. But this is something that can usually be checked online in advance.

I would recommend getting at least a small amount of foreign currency at home before you go. You will need some money to get out of the airport, and it is best not to be changing money when you are stressed, jetlagged, in a rush, or struggling to understand the language.

What if I don’t have any cash to exchange?

You don’t usually need cash in your home country’s currency to be able to exchange money at these outlets. Most of them accept payments by credit or debit card as well. This is not always the case, so it’s a good thing to check before you go. So if you run out of cash while travelling, don’t panic!

2. ATM withdrawals in foreign country

how to withdraw money in foreign country

If you don’t have a currency exchange outlet, it is normally pretty easy to cash some local currency out of an ATM. As long as you have a common credit card brand, like Visa or Mastercard, your card will be accepted in most ATMs around the world.

However, I wouldn’t generally recommend this method for a few reasons.

Foreign ATM withdrawals can be costly

Firstly, they can come with a lot of fees. ATM machines will usually charge fees for using cards which aren’t from their bank. Then, your bank may charge a fee for cashing out abroad. On top of all that, foreign exchange rates of ATM machines tend not very competitive at all. So it can really add up and end up being pretty expensive to take cash out of the ATM when you travel.

Foreign ATM withdrawals can be risky

Another reason is the chance of having your card skimmed. You can’t trust ATMs to be secure in some countries, and some people steal credit card details of those who have put their card in a machine. Once they’ve got the details, they can use them to cash out and empty your account. This might sound far-fetched, but it’s actually happened to us twice in South America – once in Brazil and once in Argentina. So it’s definitely a real risk. Also, one time I tried to cash out in Brazil and no money came out of the machine – even though my account was charged. I eventually got it sorted out, but it’s good to be aware of these kind of risks. Have a back-up plan if something happens to your card.

3. Sending money through Western Union

western union to cash out abroad

You might think that Western Union is only for sending money to other people abroad. While this is its main purpose, it can be used to cash out your own money as well. This is an option I discovered recently, on my last trip to South America. Basically, Argentina is a huge cash nation – card is not accepted in many places, and we were caught out by that a few times. The only problem was that their currency exchange outlets didn’t accept card, and the ATMs all charged exorbitant fees. That’s when I discovered the option of cashing out at Western Union.

How to use Western Union to cash out while travelling:

Firstly, you will need to make sure there is a Western Union outlet near where you are. They are all over the world, so you should find one not too far away. Once you’re sure you have somewhere nearby to collect your cash, download the Western Union app on your phone. Then, tap “send money”. You can choose the country you’re in and set the amount you want to send. It will tell you the rate and the fees. You can make the recipient yourself, or anyone you are travelling with. Then, whoever is the recipient has to go to the Western Union to pick up the money. Make sure you have your passport on you, as well as the reference number for the transaction.

In Argentina, we found the rate at Western Union to be pretty good and the fees minimal, so we saved a lot of money with this method!

4. Paying by credit or debit card

pay with credit card or debit card when you travel

Nowadays, it is pretty easy to travel just with your card as Visa and Mastercard are accepted nearly everywhere around the world (with American Express not too far behind). Travelling with just your card also makes things super easy and convenient. You don’t have to worry about taking huge amounts of cash everywhere and trying to count out the right change everywhere you go. However, if you are planning to pay only by credit card or debit card when you travel, here are some things to keep in mind.

Does the country accept card everywhere?

Firstly, you need to do some research and make sure the country you are travelling to is receptive to card payments. For example, most businesses in Argentina heavily discourage payments by credit card. In Australia, a lot of places charge extra for paying by card. Another thing to keep in mind is that some places will only accept one brand of credit card, usually Visa. While on the whole, things are changing as everyone slowly makes their way into the 21st century, it’s best to make sure paying by card will make things easier, not harder.

Will your card have any problems abroad?

Another thing to consider is whether your card can be used abroad. Check the terms of your card and make sure there will be no problems with using it in another country. Best practise is to call your bank and let them know you will be travelling. This serves two purposes: firstly, it ensures they won’t block your card due to “suspicious” activity when a foreign transaction comes up. Secondly, it allows you to clear up any doubts and see if there will be any extra charges for using the card abroad. Which brings me to my next point.

What are the fees for using the card?

Your bank will obviously have to convert the foreign currency back to your currency, so it’s a good idea to check what their rate is compared to other ways to pay abroad. A lot of banks also charge a fee for every transaction you make in a different country, so find out what this is and whether it is worth it. Another fee to keep in mind is the one the retailer in the foreign country charges. Obviously this will vary from merchant to merchant, but it is customary in some countries to charge extra for using a card, so be aware of this and maybe have some backup cash if this is likely to be an issue.

Consider a travel credit card

If your bank is difficult about letting you use your card abroad, or you don’t think their charges are reasonable, you could consider getting a travel credit card. These cards allow you to load foreign currencies directly onto them so you can make sure you have a good rate, and you don’t have to worry about extra fees or charges. The only problem with these are they generally can only take a specific few countries, so whether it will be useful to you depends where you’re going.

5. Paying by bank transfer

make payments when travelling with Transferwise

The final way to pay abroad that can be useful is paying the business by direct bank transfer. This is best done with Transferwise. Transferwise basically ensures you get the best currency exchange rate for your foreign transfer, no matter where you are transferring to, so it is a great way to pay if you have the option. When Felipe and I were paying our Brazilian wedding vendors (more on that later!) we locked in a good rate with Transferwise and saved quite a lot of money that way.

 How to use Transferwise

It’s pretty easy. Just set up an account with Transferwise if you don’t already have one. Make sure you get all the account details of the recipient. This will include their contact details and often their national identification number as well. Every country has different requirements for transferring money, but Transfer Wise will let you know which details to collect, and the recipient should know as well. The good thing is that the recipient does not need a Transferwise account.

The cheapest way to transfer with Transferwise is to do a manual bank transfer. If you select this option, Transferwise will give you the exact amount to transfer and the transaction number. Then you just need to go to your bank and make the payment. Make sure the account you transfer from is under the same name as your Transferwise account, otherwise they may not accept the payment.

Checklist: Things to check before you go to get the best currency exchange for travel

There were quite a few tips in this post of things to do before you go to make sure you get the best currency exchange for travel. Here is a list of them so you can make sure you do them all.

  • Advise your bank you will be travelling and to which countries
  • Ask your bank about any fees for paying by card abroad
  • Ask your bank how they calculate their exchange rate
  • Check your bank fees for withdrawing from a foreign ATM
  • Check the most common payment method in your destination country
  • See if they have Western Union in the cities you will be visiting
  • Check the exchange rate in different outlets in your home country and destination country, and make note of the cheapest ones. These can usually be checked online.
  • Get some cash exchanged at home before you go
  • Look up the ATM fees for the country you are visiting
  • Make sure your credit card brand is widely accepted in the country

How you end up paying for things abroad will depend very much on where you are going. Every country has their unique way of doing things. The key is to find out a bit about how it works before you get there. Do some research and you can save a lot of money on currency exchange for your next trip! If you have any other tips for the best currency exchange for travel, please leave a comment!

how to get the best currency exchange for travel



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