Getting Your Money Overseas - Currency Conversion, Credit Cards, Etc

One of our biggest concerns leaving the country was managing the money while we were gone, making sure we had access to it, and not losing any more to currency conversions than we could help. We picked up some really great tips from other travelers before we left, and have figured out a few things on our own too.

One of the biggest things we did before we left was open a checking account with Charles Schwab. They don’t charge ATM fees anywhere in the world, and they reimburse you for ones you are charged. We had no problem getting reimbursed automatically for the ATM fees we encountered in the States, but didn’t keep receipts from the first few ATMs we used internationally (Lesson #1) so we aren’t sure if those charged us anything or not. The amount that shows up as ‘withdrawn’ is always a very odd amount, as it is based on current conversions and those don’t generate even number (as an example, 1000 Icelandic Krona is $8.17 per Google right now, so pulling a few thousand Krona plus an ATM fee leads to a strange amount being pulled from the account and the conversion rate is always a little off from Google's listing, so it is hard to determine if a fee was charged). The vast majority of ATMs we have encountered in Sweden, Poland, and the UK have had free withdrawals, so it hasn’t been an issue, but now we’re paying much closer attention. Having the ability to pull cash in small increments because you aren’t paying ATM fees is much nicer than trying to pull large amounts and worry about keeping large sums safe while you travel.

The next thing we read about and made sure we had, was a credit card with no foreign transaction fees. We each had a credit card from Chase already (I have the Marriott card, and Cara uses the United one) and neither of them charge foreign transaction fees, meaning they don’t add a fee for converting from whatever the local currency is to U.S. dollars. Some credit cards add a fee of a couple percent just to bill you in US dollars, and this adds up to large amounts over a year. We try to pay with credit card for most things as it is easier and means we don’t have to carry as much cash, so those fees would end up having a big impact. (Cara’s note: We originally opened these credit cards to pay for our wedding. By charging large amounts at one time, we were able to gain all of the max sign-up benefits quickly. We gained enough airline points to get a few ‘free’ tickets via Delta and United.)

Sometimes at retailers, restaurants, and ATMs, the machine or cashier will ask if you want to pay in the local currency or USD. Provided you don’t have foreign transaction fees, choose the local currency! The exchange rate your credit card company uses is going to be better, as the machine is going to charge a premium for the conversion. For example, we were pulling £200 from an ATM to pay for some lodging and it asked if we wanted them to charge us in US dollars to the tune of $277. We said no, pulled the £200, and when I checked our account, Charles Schwab had pulled $264, so we saved $13 by using the local currency and letting Charles Schwab do the conversion. ATMs and credit cards will also give you a MUCH better rate than a currency conversion place (or likely your local bank), so don’t leave home with a bunch of US dollars planning on converting it at the airport, just pull cash once you land!

We left the US with 1 credit card each, our Charles Schwab debit cards, and debit cards for our credit union accounts as backups, only to be used in emergency. Cara had some issues last time she traveled to Africa, and the credit union card was the only one that worked. We also brought a small number of US dollars stashed in our stuff just in case we are stuck somewhere, we’ll be able to convert it to the local currency. We also got a few Euros from the local bank, but the exchange rate wasn’t as good as we would have gotten here. It is good to have enough to cover a few expenses on arrival in case you are having issues with all your cards, so you can survive for a day or two while you sort it out.

Biggest lesson: Keep receipts until you verify the amount charged on your card, especially for ATMs as this is the only way to know if they charged a fee.

In future posts we’ll talk about budgeting, managing and tracking expenses, and how well we are sticking to our budget.