Accessing and converting money while travelling abroad will always cost you but there are some ways of doing this that will cost you less. Converting your money can comes with some horrendous fees which are often invisible to you, to help you here are some of the most common high fee currency exchanges to avoid.
Converting Currency – Having some of the local currency in your pocket when you arrive in a foreign country may make you feel more comfortable, getting your cash before you leave Canada is a good idea. Check online for the best exchange rates at local banks and currency exchanges. Once you arrive at your destination do not exchange cash at an airport currency exchange counter, their fees are hugely overpriced sometimes as much as 15% more than at a bank. While you are away use local bank branches or currency exchanges in town to convert your cash.
Watch out for money converting scams such as being short changed, check that the amount you are quoted is what you actually receive.
Credit Card Conversion – most credit cards companies will add on a foreign exchange fee of around 2.5% when you use your card abroad. To avoid these fees, get a travel credit card with free foreign exchange. These often come with other travel perks, but you will also pay an annual fee. Beware of vendors offering to sell to you in your home currency they are not doing you any favours, the deal will come with bigger and mostly invisible charges.
Debit and ATM Conversion – Banks also get a slice of the pie from currency conversion fees. Hidden fees on ATM withdrawals and debit card charges are taken as a percentage of your transaction. Although this is a fee, it is usually at the lowest conversion rate that you will find except for special exchange free credit cards. If you are using an ATM machine abroad, make sure that it is bank affiliated as private machines will add an extra fee on top of the currency conversion fee.
Credit Card Cash Advances – If the ATM will not accept your debit card you may have no option but to use your credit card for a cash advance. Whether at home or abroad this type of transaction is expensive. You will be charged a credit card advance fee as well as compounding interest from the day that you make the withdrawal on your entire credit card balance. To avoid excess charges, go online as soon as you can and pay off your card in full (including the withdrawal service charge), preferably before withdrawing cash.
Traveler’s Cheques – Traveler’s cheques used to be the cheapest way to access cash while abroad but now fewer places are accepting them and they are harder to cash. You will also pay commissions and fees on traveler’s cheques, and vendors may charge you a fee to cover the cost of cashing them.