Saturday, November 3, 2012

How to Avoid Foreign Transaction Fees

Six currencies + Six countries = One trip
Exchange fees weren't a problem due to the tips in this post!
There's nothing worse than traveling between countries and feeling helpless in regards to exchange rates and foreign transaction fees.  On a recent Baltic cruise I visited six countries with six different currencies, which could've turned into a nightmare. But, there are several things you can do to avoid getting taken advantage of and get the most bang for your buck (or Euro, or Krona, or Yuan).

First, never use the exchanges at the airport, unless you absolutely have to. The best exchange rates are found using your ATM card or through a bank. Make sure to check before you leave home what, if any, charges you'll get by using foreign ATMs and how many transactions you're allowed per month. Get as much cash out as you're comfortable carrying around, to avoid multiple ATM withdrawal fees, and distribute the cash among your travel buddies/luggage for safety reasons. If you get to the end of your trip and have money left, don't take it home to exchange later.  You'll lose money on both the initial and final exchanges - ouch! Instead, most hotels will allow you to pay using cash and then put the rest of the bill on your credit card. Or, wait to buy souvenirs until the end of trip and use the remainder of your cash on that!  Even better, save it for the next trip!

If you're going to rely mostly on credit cards, make sure to call ahead and let the company know the dates and places you'll be traveling to, in order to avoid them freezing your account. (They will do this!)  Also ask about foreign transaction fees, which typically range from 1-3% of each purchase, and use whichever card has the lowest rate, unless you have a special travel related credit card, which sometimes carry no foreign transaction fees. (Check out my previous post about this topic.) In addition, if you're in a foreign country and they ask if you want to be charged in your home currency, don't. It's better to be charged in the local currency so you get the exchange rate the credit card company gets, which is undoubtedly better than what Mr. Souvenir Shop owner is going to offer. One final piece of advice, when using a credit card, make sure you're not being charged a "cash advance." This happened to me in New Zealand, resulting in a $30 fee for a $10 charge! Hope these tips help keep a little extra cash in your pocket resulting in a more enjoyable trip!


  1. If you have a Discover Card, use it abroad! Outside of the U.S. it's called Diners Club. There are no international/exchange fees on purchases or ATM cash advances. You have to set up a pin (easy to do) before you can get a cash advance, but it will save you lots on fees!

    See link for more information:

    1. Great tip! The fees really add up - so using a fee free card is excellent!

  2. Thanks Liz, ...did not know about cash advance...we always need to pay attention:)

  3. If you plan to travel, using a credit card is the best option to use for payments. In this way, you can avoid all of the inconveniences that go with using bills, such as changing the currency, being robbed, and more.