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Traveling abroad? Save money changing money

Consumer Reports News: May 16, 2013 02:38 PM

It's one thing to blow the bank on a gourmet dinner at a Paris restaurant, quite another to pay more than you need to for it because of fees or a bad exchange rate. So it will come as good news to summer travelers abroad that the dollar buys more of the major currencies (the Euro, British Pound, and Japanese Yen) than it did at the beginning of 2013. What's more, you don't have to give back the gain in foreign transaction or conversion fees when you pay using a credit card.

Those fees currently average 2.24 percent across all cards, according to CardHub.com. Although the typical foreign transaction fee is still 3 percent, there are more credit cards that don't charge a fee than in prior years. And half of our recommended travel cards don't charge a transaction fee at all.

While it might make you feel secure to grab some foreign currency from your bank ahead of time or at the airport foreign exchange counter, the rate you'll receive will be even worse than a fee you might incur when paying by credit card—either because of a transaction fee, or because the exchange rate is simply terrible, or both. If you can wait, withdraw money at a bank ATM in the country you're visiting. Despite what you may have read about new chip-and-PIN technology of foreign debit cards, most ATMs abroad still accept the magnetic strip cards widely issued in the U.S. And depending on your bank or credit union, some or all of your ATM transactions will be free. Finally, the exchange rate you receive from an ATM outside your adopted Parisian bistro will almost certainly be more favorable.

Check our best travel credit cards and Airline Travel Buying Guide for more travel tips.

Chris Horymski

   

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