Should you order foreign currency before you travel?
Key takeaways
- Ordering foreign currency ahead of a trip can help lower the cost of exchanging money and maximize the amount you get in return.
- Using airport currency exchange services is often the most expensive way to obtain foreign currency.
- Consider a mix of payment methods: some pre-ordered cash plus credit cards without foreign transaction fees for larger purchases.
Most travelers look forward to unique meals or exciting excursions while traveling but overlook how they’ll handle everyday purchases while abroad. While credit cards are widely accepted in many locations, some places still operate primarily in cash or won’t accept cards for small transactions.
Understanding how to get foreign currency affordably can help you maximize your travel budget. Often, exchanging money before departure offers better rates and lower fees than waiting until you arrive.
Understanding exchange rates
An exchange rate is how much one currency costs compared to another. For example, when exchanging U.S. dollars for euros, the rate determines how many euros you’ll receive for each dollar.
Exchange rates fluctuate constantly based on global market conditions, including supply and demand and each country’s economic stability. The global market that controls exchange rates is called the forex market, where financial institutions trade currencies using standard acronyms like USD for U.S. dollars and EUR for euros.
When budgeting for a trip, it’s a good idea to calculate exchange rates beforehand to know how far your money will go. For instance, if the current rate is 0.94 euros to the dollar, $100 would give you €94. This means your purchasing power may differ significantly from what you’re used to at home.
Options for ordering foreign currency when you travel
Ordering foreign currency before your trip can secure better exchange rates and reduce stress upon arrival. The rate you’ll receive varies by provider, with banks typically offering the most competitive rates and lowest fees.
Ordering foreign currency from your bank
Most banks let customers order foreign currency in person, by phone or online, though you’ll need an account with them. Processing usually takes three days or less, sometimes even the same day, but confirm the timeline with your bank. Many banks offer home delivery for a small fee — just factor in additional time for shipping.
Exchanging money in an airport
While convenient, airport currency exchange typically comes with premium pricing. You could pay up to 15 percent more than bank rates, plus face additional hidden fees. This convenience often comes at a significant cost.
Banks vs. airport kiosks
You’ll pay a currency conversion fee every time you exchange between two currencies, so you won’t get the market rate for your currency no matter where you swap it. However, when you order currency directly from your bank, you can usually get lower conversion fees than other options.
Let’s compare actual rates: A Wells Fargo bank currently offers about €90 for $100, while a Dublin airport kiosk provides only €85 for the same amount. That €5 difference represents money you could spend on your trip instead of exchange fees.
Pros and cons of exchanging currency before you travel
There are benefits and disadvantages to ordering foreign currency ahead of a trip, but it largely depends on your spending habits and goals while traveling. Here’s what to consider before you make a decision.
Pros
- Convenience: You’ll have cash on hand for immediate expenses, like taxis and tips, and you can skip the potentially long airport lines when exchanging currency upon arrival.
- Better exchange rates: Lock in a more favorable exchange rate before your trip and avoid high fees at airports or local exchanges.
- Peace of mind: You won’t have to worry about finding ATMs or foreign banks in a new place, and you can get familiar with local currency before you land.
Cons
- Risk of unused currency: You might lose money if you don’t use all of the foreign currency, as there may be restrictions on returning or exchanging unused currency at a reasonable rate.
- Reliance on cash: Some travelers prefer not to carry a lot of cash for fear of losing it or having it stolen, and cash doesn’t earn rewards like credit cards do.
- Budgeting issues: Keeping track of cash spent can be challenging, especially while on the go. You may be tempted to spend more to use up extra foreign cash.
How to decide where to get foreign currency
Start by checking current rates using an online currency calculator to check current rates.
You can then check your bank’s website for its current exchange rates. Compare those rates to the current exchange rates offered at your destination airport to see which is more affordable. This research helps maximize your travel budget.
Alternative ways to pay abroad
Ordering foreign currency ahead of time isn’t the only way to get the cash you need for your travels. Here are some other options.
ATMs abroad
If you don’t have time to order cash or prefer not to travel with foreign currency, you can opt to withdraw cash from a local ATM when you arrive at your destination.
While fees typically range from $2 to $5 per transaction, plus possible conversion fees, you can minimize costs by making fewer, larger withdrawals. Some banks even reimburse international ATM fees.
Credit or debit cards
It’s become more popular to use a credit card or debit card to pay for travel. Some people find it easier to pay with a card and avoid the need to carry cash. Plus, you may earn rewards on your spending, especially with travel credit cards.
Before you make this choice, you’ll want to consider a few things. First, make sure your bank or card provider doesn’t charge foreign transaction fees (typically 1 to 3 percent) and confirm that your destination widely accepts credit cards.
The bottom line
Pre-ordering foreign currency often provides the best exchange rates and lowest fees, particularly compared to airport kiosks. This strategy works well for travelers who want immediate access to cash for essentials upon arrival.
However, a combined approach might work best: carry some pre-ordered cash for immediate needs, then use cards or ATM withdrawals for additional expenses. This strategy balances convenience with cost-effectiveness while potentially earning rewards on larger purchases.
Frequently asked questions
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