Should you use 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. ATMs – 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) and be sure no one can see you type in your PIN number. There are “stand alone” ATMs in many touristy areas that are NOT related to a banking institution, but these tend to charge higher transaction fees, have lower exchange rates and be less secure. Always stick with a well-known name. Check with 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 and be sure to let them know that you are going to be using your ATM card in foreign countries so they won’t put a security “Hold” on your card when you withdraw cash in Prague. Just put in your card and choose “English” as the language option. Then proceed as you usually do here in America, only realize that you are withdrawing EURO and not US Dollars - If you withdraw 100 Euro, the equivalent in USD will be debited from your account. Most Europeans don’t call them ATM’s; by the way - look for “Bankomat” or “Cash Point” or sometimes a “Distributeur”. Don’t worry; you’ll know it when you see it!

2. Your Home Bank – Your local US bank can order you some foreign currency before you ever leave home. I always order a small amount from my bank to make sure that I can arrive comfortably in my destination and know that I could pay for a taxi and tips if I needed to. The exchange rate is usually not as good as using ATMs in Europe, so I limit it to just the amount I think I need to get started with; Enough to cover a taxi and some food until I can find a local bankomat. Be sure to give your bank a few days to order the foreign currency!

3. Currency Exchange bureaus – These should always 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 that you want to convert all into Euro at once). 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 might have trouble using a non-chipped card for some purchases...especially 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 don’t 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 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.

And remember, Europe is much more of a cash society than we not use your debit or credit card for a 2 Euro cup of coffee or simple meal in a sidewalk cafe...I always save my credit card for hotel stays, the rare “fine dining” restaurant experience or large souvenir purchases that I am shipping home. Using cash just makes more sense....and you don’t have those huge credit card bills waiting for you at home when you return!

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 get packing!

#tipsandtricks #money

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