Will That Be Cash Or Credit

Gone are the days of American Express Traveler’s Cheques and having to find a convenient place to cash them when you run out of money in a foreign country! Today, there are more ways than ever to make sure you always have that foreign cash handy when exploring Europe — But, not all Euros are created equal! Here is a short guide to obtaining and dealing with foreign currency on your next vacation.

1. ATM’s — By far the easiest and smartest way to access cash while abroad is to use an Automated Teller Machine (or ATM).  The conversion rate is usually the best available — just proceed with reasonable caution.  Be sure that the ATM is located in a well-lit, secure area (preferably inside the front door of a bank).  Be sure no one can see you type in your PIN number.  There are “stand alone” ATM’s in many touristy areas that are NOT related to a banking institution, charge higher transaction fees, have lower exchange rates, and tend to be less secure.  Always stick with a well-known name.  Check your home bank before you leave to see if they have any agreements with foreign banks in the country you are visiting to minimize transaction fees. Be sure to let them know that you are going to be using your ATM card in foreign countries so they will not put a security “Hold” on your card when you withdraw cash in Prague!

Here’s what to do:  Just put in your card, and choose “English” as the language option.  Then proceed as you usually do here in America — but realize you are withdrawing Euro and not US Dollars.  If you withdraw 100 Euro, the equivalent in USD will be debited from your account.  (Today’s exhange rate is 1 Euro = $1.09 — much better than it has been for many years!)  By the way, most Europeans do not call them ATM’s — look for “Bankomat” or “Cash Point” or sometimes a “Distributeur.”  Don’t worry — you will know it when you see it!

2.  Your Home Bank — Your local US bank can order you some foreign currency before you leave home.  You can have your bank order a small amount of foreign currency to get you started once you arrive at your destination.  Limit the amount you get from your bank because the exchange rate is usually not as good as using ATM’s in Europe.  If you decide to order the foreign currency, you will  only need enough to cover a taxi or get some food until you can find a local bankomat.  Be sure to give your bank a few days to a week to order the foreign currency!

3.  Currency Exchange Bureaus — These should be your LAST resort, especially the ones located in airports, train stations, and highly touristy areas.  Rates and fees are very unfavorable.  The only time I recommend a change bureau is if you have several different kinds of currency that you want to combine into one — for example, you have British Pounds, US Dollars, and Norwegian Kroner and would like to convert all of them into Euro.  Just be prepared to be hit with a substantial fee.

4.  Credit Cards — If you plan to make major purchases while abroad, you’re almost always better off putting it on a credit card that can give you certain protections — especially if the merchant is going to ship the item to you back home in the US.  If possible, find a credit card that has the “chip” embedded, instead of just the magnetic stripe on the back.  These are more commonly used in Europe, and you may have trouble using a non-chipped card for some purchases, particularly gas stations and restaurants.  And, be sure to let your credit card company know that you will be using the card abroad during your trip so they do not place a security “Hold” on your account when a charge comes in from Poland! Also, sometimes the merchant will ask if you want your purchase to be in the local currency or US Dollars — ALWAYS CHOOSE LOCAL CURRENCY!  If you ask for the charge to be made in US Dollars, you will usually be hit with an extremely unfavorable exchange rate. There are lots of credit cards out there that don’t charge international transaction fees, so do your homework before you travel.

Remember, Europe is much more of a cash society than we are — do not use your debit or credit card for a 2 Euro cup of coffee or simple meal at a sidewalk cafe.  Save your credit card for hotel stays, the rare “fine dining” restaurant experience, or large purchases that you plan to ship home.  Using cash just makes more sense.

So, you see? With just a little planning and knowledge, you can ensure that your trip to Europe is as rewarding financially as it is personally! And with the strength of the US Dollar against the Euro right now, there has never been a better time to use your new-found knowledge! Let’s start packing!