THINGS TO NOTE WHEN USING FOREIGN CURRENCY

 Foreign currency has its own share of complications: unfavorable exchange rates, leftover notes and coins, hefty exchange fees when using credit cards, and more. 

Doing some research on the currency and following a couple of simple universal rules on acquiring and disposing of foreign currency can add value and convenience to any international journey.

Things to note are

• Find out how foreign currency will hit your debit card. Debit cards can be tricky to use outside your country. There are often additional flat or percentage fees applicable to transactions at points of sale outside your country. Maintaining a bank account specifically for foreign cash withdrawals is vital. This is by finding an account with a debit card that refunds ATM fees and doesn’t charge for foreign withdrawals.

• Avoid Paying in US Dollars Abroad. At the point of sale, an option will come up on the screen to pay in dollars or the local currency. There are two important things to remember here. First, when credit card processors levy fees on foreign purchases, it’s on foreign transactions, not foreign currency so even payments in dollars will be subject to the fees. Second, the exchange rates for these purchases are typically less favorable than the ones used by the card issuer. So always pay in the local currency.

• Know When to Exchange Foreign Currency and When to Hang On. Small amounts of foreign currency isn’t worth the trouble of exchanging. When the exchange rates are unfavorable and the process is time-consuming, it may make more sense to simply hang on to the leftover bank notes.  Bank notes can also be given or informally sold to friends and family for their own trips, or coins can be kept as souvenirs of a once-in-a-lifetime journey.

• Don’t Pre-Purchase Foreign Currency at Banks or in Airports. The long and short of it is the exchange rate isn’t favorable and the commissions are often steep. Many banks will order foreign currency in large amounts to have sent by courier to a local branch. This option is best suited for travelers who are planning to take significant amounts of cash—higher than their daily ATM withdrawal limits or who are bound for destinations where ATMs and exchange houses are less common.