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When you are going overseas for a vacation, people often forget they need to exchange currency until they get where they’re going.  When they land and exit the aircraft, and enter the terminal, they are usually greeted with a currency exchange kiosk and they suddenly remember, “Oh yes!  We need to exchange currency!”  Others who plan carefully in advance will often visit their local Travelex, or other currency exchange place and trade a hefty sum of US dollars for Euros or whatever currency they’re looking for.  Either way, visiting one of these money exchange stores is not doing you any favors.  Many people don’t realize that currency exchanges places are a business, therefore they tack on a surcharge or will exchange your money at a higher rate than the current difference in each currencies value.  In doing this, you are donating a good portion of your vacation money to these companies.  It really doesn’t matter if you visit one in the USA or in Europe or another foreign country, it works the same way.  I have done my research on this topic and can assure you from our own personal experiences that there is a better and more cost effective way.  But this depends on your bank or credit union.  “My bank or credit union?” you may ask.  Yes!   Did you know you can get foreign currency right out of an ATM?  You can, and it’s usually always much cheaper too.

European ATMs located in airport terminals always have an English option.  All you need to do is pick one with a Visa or MasterCard logo and go through the steps like you would at your local ATM.  Request a withdrawal for cash.  Yes, there will be fees involved, but you’ll most definitely get a better rate then you would using a currency exchange place – in the US or abroad.

Before you depart for your vacation, call your personal bank or credit union and first ask them if you can use your debit card in Europe, or wherever it is you wish to travel.  Today most foreign countries around the world will accept cards with a Visa or MasterCard logo.  Second, ask them if there are fees associated with using a foreign ATM for a withdrawal.  Some banks may issue a flat $2-5 transaction fee for using an out-of-network ATM, and a percentage of your total for the currency exchange, however the actual currency exchange rate they offer is usually much lower than what a currency exchange “store” offers.

For example, my personal credit union charges a 1% foreign transaction fee, but no fee associated with using a foreign ATM.  Therefore my only other fee I may incur is the fee charged from the owner of the foreign ATM, which is usually not much, if any.

How much of a difference can this make?  Well, suppose you’re going to take out €500 (500 Euros) for spending cash for your European vacation.  You visit a currency a currency exchange place at the airport or even locally.  You learn this will cost you $562.  You exchange the money thinking “ok, I know Euros are worth more than dollars, so this is probably good”.  Euros ARE worth more than dollars, but currently not that much more.  At the time of this writing the exchange rate is €0.95 to $1.00.

Doing the math you’ll realize that €500 is equal to $526. Tack on a 1% fee from the ATM charged by your local bank or credit union, your total is $532.  This is $30 less than using a currency exchange place!  Like I said before, the ATM may add a small €2 or €3 fee for using the ATM, but you are still coming out with a lot more money in your pocket.

My last bit of advice on this topic would be to check with your personal bank or credit union regarding how much you can withdrawal in a 24 hour period.  You may be able to adjust this amount if you wish to withdraw a higher sum.  It’s also a good idea to take out more cash than you think you’ll need.  This way you only have to visit the ATM once and can avoid multiple transaction fees.  Try to make a good estimate because any leftover cash you will have to travel home with.  It’s not worth exchanging it back to US dollars.  We normally estimate high, and as we are approaching the end of our trip, we will strictly use cash for everything and hope to run out by the time we leave the country.  This strategy worked nearly perfectly for us when we traveled to Brazil!  I boarded the aircraft home with R$2 in my pocket (Brazilian Reals).  This amounted to about $0.50 USD!

Happy traveling everyone!

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