Foreign Currency Tips: Beginner's Guide to Managing Your Money on the Road

Whenever I use an ATM in a foreign country, I’m hyper-vigilant, even a little paranoid. I’ll ask a companion to stand guard, and when I’m alone, I cover the keypad with my hand. If something doesn’t seem quite right about the ATM, or if I see anyone loitering nearby, I’ll pass it by and find another bank. Thieves do target tourists, and I never want to make the assumption that I don’t look like a tourist.

I don’t carry a large amount of cash, knowing I can charge most of my major purchases — hotel, restaurants, expensive souvenirs — as Visa and MasterCard are widely accepted. For charging purchases, I sometimes use a Capital One Venture card, which doesn’t impose fees for international use. A partial list of no-fee cards includes the Chase Sapphire Preferred card, as well as a number of other Chase cards; American Express Platinum; some Bank of America cards; and Discover, which is accepted in Japan by stores displaying the JCB logo and in China through China Union Pay.

Some cards issued by credit unions either charge low fees (as little as 1%) or no fees at all.

Inquire about the fees your credit card company may assess before you leave home. If you don’t, you may be hit with a big bill — usually a 3% (minimum) cash advance fee, plus ATM fees. And the money you withdraw will be subject to the company’s highest interest rates, up to 20%, beginning the day you withdraw the money (no grace period) — and until you pay off your entire balance.

Also, be sure to inform your credit card company of your travel plans. If you don’t, your card may be declined. Fraud has become such a worldwide problem that companies are on the alert.

And if, for some reason, you do plan to change some cash on arrival, try to avoid the Travelex currency exchange desks in airports. On a day when the exchange rate was €75.95 for $100, Travelex was offering me only €68.81.

Know before you go

Track current exchange rates with converters on sites like Yahoo! Finance, exchangerate.com, and xe.com, to name just a couple. Xe.com is one of several companies offering a free smartphone app currency converter.

Since the introduction of the Euro, life has become easier for travelers to most European countries — no more change purses full of coins for every country visited. Euros are also widely accepted in some countries that have their own currencies, such as Switzerland and Turkey.

In hopeful anticipation of my next trip, I get extra cash whenever the exchange rate is favorable, as it has been recently.

Of course, on many trips you’ll never have to change money at all. In Jamaica, American dollars are more than welcome, even by small vendors at craft fairs. This holds true for most Caribbean islands and many countries throughout Latin America, such as: Panama, Ecuador, El Salvador, the Bahamas, Bermuda, Cayman Islands, Turks and Caicos, the British Virgin Islands, and members of the Organisation of Eastern Caribbean States (Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St Vincent and the Grenadines). In fact, armed with American dollars and a fistful of Euros for St. Barths, my mother and I managed a two-week cruise of the Caribbean without even seeing foreign currency.

Several countries around the world have turned to the dollar to stabilize their troubled economies. In Cambodia, the dollar is more welcome than the local riel. Zimbabwe began using the dollar as one of its official currencies in 2009. Their biggest problem now is a shortage of change, so if you go to this Southern African nation, bring plenty of small bills and coins.