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Dollar Bills

The Spending Money Internationally Game

Wherever your adventure takes you, it's going to cost money. Knowing how to spend money internationally can help save wasted money on foreign transaction fees and instead use it for the fun parts of your trip. In this article, I'll give you recommendations on how to best spend your money on your next adventure.


Traveling in another country with foreign currency is a game with many moving parts. Think of foreign currency as another good that you are buying for the trip. When you use an ATM, you are paying the local bank a certain amount of your local currency for the foreign currency. The “price” of this foreign currency is based on current exchange rates as well as transaction fees assigned by both the foreign bank to give you foreign currency and your home bank to give its currency to the foreign bank. Just like picking a hotel, if you are getting the same product, in this case, a fixed amount of foreign currency, you want to buy it at the lowest price.


In most Asian countries, a majority of financial transactions are made in cash, while other countries have greater ability to process credit cards. Knowing the policies and fees on your credit cards and ATMs will dictate the best way for you to spend money. Travel credit cards with your preferred airline are a great way to accumulate rewards for travel and to save on foreign transaction fees. In general, if you can use a travel credit card with no fee, do it. The credit card likely has a better conversion rate compared to what you will get from a foreign bank’s ATM.


However, not every merchant will accept credit cards and will require local currency. ATM withdrawals can quickly become a large expense with no reward. Typically, the foreign bank and your home bank will both charge you a flat fee for every withdrawal. Research options with local credit unions that offer a small percentage fee for each withdrawal instead of a flat rate. That way, there is no inhibitor to making multiple withdrawals throughout the trip.


When withdrawing from an ATM, there is a balance between taking too much and too little cash out. Take out too little cash, and you will have to withdraw again and possibly incur another fee. Take out too much, and you are at greater risk of having your money lost or stolen.


The goal is for you to not be left with any foreign currency upon departure. Currency exchange companies are notoriously cheap and will offer far less for the same money as you paid for it. If you are left with cash, avoid currency exchanges at the airport and try to exchange cash at local banks in the city. For any credit or debit card, you plan on using internationally, make sure to alert your bank in advance to prevent the unwanted closure of your account.


Thanks for reading, and please feel free to add any comments or questions below!

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