8 Hacks You Need to Know Whenever You’re Using Foreign Currency

Debit cards can be tricky to use outside the United States. There are often additional flat or percentage fees applicable to transactions at points of sale outside the United States (for debit cards issued by U.S. banks). Many countries have more stringent requirements on card transactions (such as chip-and-pin or contactless capabilities) and often offer less-than-favorable exchange rates.

As a general rule, the purchase protections provided by credit cards make them a better choice for transactions outside the United States, while debit cards are still good for getting cash at foreign ATMs. Frequent travelers may benefit from maintaining a bank account specifically for foreign cash withdrawals by finding an account with a debit card that refunds ATM fees and doesn’t charge for foreign withdrawals. They can also be helpful if lost or stolen while traveling, keeping the main checking account untouched.

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. It’s worth noting that travelers carrying more than $10,000 in cash must also file a report with U.S. Customs.

Most airports around the world have secure ATMs and exchange desks in Customs before leaving the secure area. Travelers who need local currency immediately upon arrival will find this the most convenient option.

Coins can be especially difficult to deal with at the end of a trip. They’re not generally accepted by exchange houses or banks, and even last-minute purchases at the airport won’t typically free a traveler from all their leftover foreign coins.

An easy solution is to apply all the accumulated coins and banknotes toward the last hotel bill of the trip before departing. Most hotels will accept cash payments (even in tiny amounts of just loose change) toward a hotel bill, settling the rest on a credit card. Travelers can then depart for the cashless haven of the airport, where cards are often widely accepted. It’s worth checking with the front desk or concierge to confirm if the airport will require cash (and if so, how much).

Many vendors outside the United States offer the option of paying in dollars on card transactions. 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. As tempting as it seems, the terms for paying in dollars abroad aren’t typically favorable for travelers.

Once past the exchange-rich travel environment, it can be difficult to exchange currency, particularly in small amounts. Many large national banks will exchange major foreign currencies for existing customers; some will even deposit exchanged currency directly into customer accounts. It’s becoming less common, but many larger hotels will exchange foreign currency at their front desks, although they may charge significant commissions.

Another option is casinos because it’s in their interest to make ready cash available to their patrons. Casino cashier cages will often accept a wide variety of foreign currencies for exchange. It’s worth noting that most exchange locations will only exchange banknotes—not coins—so take care when returning from countries like the United Kingdom, Canada, and Europe, where denominations under $5 are typically coins.

Travelers who find themselves with extra coins before boarding their flight can often donate them. The most common destination for donated coins is UNICEF’s Change for Good program, which provides envelopes for donations on participating airlines (including Aer Lingus, American Airlines, Asiana Airlines, Cathay Pacific, Cebu Pacific Air, easyJet, Japan Airlines and Qantas). Many airports also have donation boxes for coins in any currency.

Travelers who have an accumulation of coins, or are unable to donate via an airline or airport drop-off, can also mail their coins directly to the Change for Good program. It should be noted that UNICEF is currently unable to provide detailed donation receipts.

Sometimes, 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 for a future trip. 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.

Conversely, uncommon currencies or those in remote regions unlikely to merit a return trip should be shed whenever possible. Some currencies void existing bank notes and coins when issuing replacements, often with a limited window for exchanging existing currency—often with limited options for exchange outside the issuing country.

You probably don’t need that exchange calculator unless your math skills are exceptionally bad. To relativize prices, use these three methods.

For currencies greater than 50% higher or lower value than the dollar, it helps to find a rounded reference point. For example, the Mexican peso ranges between 18 and 22 to the dollar. By rounding to 20, quick exchange math can be done by moving the decimal and dividing by two; 800 pesos becomes 40 dollars.

For currencies up to 50% higher than the dollar, think of the difference as a gratuity. If the euro is trading at 1.05 to the US dollar, simply add a 5% “tip” to the price. For currencies up to 50% lower than the dollar, use the discount method. If the Canadian dollar is trading at 75 cents on the dollar, discount amounts by 25%.

The third method is for currencies with an exchange that’s not quickly “math-able”, like the Thai Baht, which at press time exchanges for about three cents in the US. Simply check the exchange amount for $10 USD, and adjust as needed. $10 USD is 343 Baht today, so round up to around 350 and use that as a reference. The important thing to remember is that exchanges vary by whose doing the exchanging, which card is being used, and other factors, so keep an eye on relative exchanges, but don’t fuss over the mental math down to the last decimal – focus instead on enjoying your travels.