*DISCLAIMER* Disregard this post, unless you have a specific interest in how to spend your money while travelling. It's really quite bland...sorry my head hurts too much to make it interesting.
I've been doing a lot of research on foreign transaction fees, exchange rates and commission fees and while it's not necessarily super interesting, it's important if you're planning to travel ANYWHERE outside the U.S. So, I figured I'd share the wealth of my vast knowledge (I bookmarked an article from NBC News, so I think I'm pretty much an expert now). Here goes nothing!
Foreign transaction fees - When travelling to another country (yes, even Canada and Mexico), every time you use your debit or credit card you are charged a fee from your credit card company/bank because it's soooooo much trouble for them to convert your money for you. The only credit card I know of that doesn't charge a FTF is Capital One (which we have, yay!). The best banks (for ATM withdrawals) are Bank of America and CitiBank (which we have too, SCORE!). Be very careful because even though 2-3% doesn't seem like a lot, it adds up! If you spend $1000 with a 3% fee, you're paying $30 in FTF! It may not seem like much, but could be dinner or a nice scarf.
Commission fees - some companies charge a commission fee for exchanging your money for you (is no where safe??). There are some companies that do not charge a commission fee in order to attract more people, BUT (there's always a BUT) be careful because when they don't charge a commission, they usually have higher exchange rates (meaning you're getting less currency for your dollars). Confused yet?
In the long run, just remember if you're exchanging a small amount of money, go for the no commission because they take the commission first. Here's an example: You want to exchange $10 into Euro (you're a straight dumbo, but whatev). Ass hat A charges no commission fee, but has a higher exchange rate, so you will get about 7 Euro instead of about 8.50 (what you would get with a good exchange rate). Ass hat B has a great exchange rate, but charges a $5 commission fee, so they will take out the $5 THEN convert the remaining $5 to Euros, leaving you with only about 4. Therefore, your best bet is to go with no commission fee (Ass hat A). If you are exchanging a lot of money (say, $1000), then you want to do the opposite because who cares about $5 in the grand scheme of things, you want the better exchange rate in that case (Ass hat B). Man, this is making no sense whatsoever, is it?
Dynamic Currency Conversion (DCC) - To be avoided at all costs, DCC is a "service" lots of stores, restaurants and ATMs will provide in which they have the cost of a transaction converted from local currency to dollars to make it easier for you (stupid Americans). This "favor" will cost you because they charge a fee each time, sort of like a foreign transaction fee. Just say no when they ask if you would like your transaction converted into dollars.
Bottom line, nothing is free people! But, there are ways to make your life a little less expensive if you follow these rules:
Wait until you're abroad to exchange your money and NEVER do it at the airport. One article compared it to buying a Snickers from a minibar.
Find an ATM, wait in line and use your 0% transaction fee debit card (and don't let them DCC you!). Take out a good amount of money and hide it in your money belt until you get to your hotel (and then hide it in the safe). Take out extra money for emergencies.
Use a credit card with a 0% foreign transaction fee. If you don't have one, use cash for larger purchases.
Sorry, this was so lame. Believe it or not, this is the Cliffs notes version. I just figured I did hours of super boring research, so no one else should have to suffer my same fate. Why yes, I have been compared to Mother Teresa, why do you ask?
Here's an adorable dog picture to settle your brain:
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They kinda look dead, don't they? Still cute...I know, I'm morbid.
I've been doing a lot of research on foreign transaction fees, exchange rates and commission fees and while it's not necessarily super interesting, it's important if you're planning to travel ANYWHERE outside the U.S. So, I figured I'd share the wealth of my vast knowledge (I bookmarked an article from NBC News, so I think I'm pretty much an expert now). Here goes nothing!
Foreign transaction fees - When travelling to another country (yes, even Canada and Mexico), every time you use your debit or credit card you are charged a fee from your credit card company/bank because it's soooooo much trouble for them to convert your money for you. The only credit card I know of that doesn't charge a FTF is Capital One (which we have, yay!). The best banks (for ATM withdrawals) are Bank of America and CitiBank (which we have too, SCORE!). Be very careful because even though 2-3% doesn't seem like a lot, it adds up! If you spend $1000 with a 3% fee, you're paying $30 in FTF! It may not seem like much, but could be dinner or a nice scarf.
Commission fees - some companies charge a commission fee for exchanging your money for you (is no where safe??). There are some companies that do not charge a commission fee in order to attract more people, BUT (there's always a BUT) be careful because when they don't charge a commission, they usually have higher exchange rates (meaning you're getting less currency for your dollars). Confused yet?
In the long run, just remember if you're exchanging a small amount of money, go for the no commission because they take the commission first. Here's an example: You want to exchange $10 into Euro (you're a straight dumbo, but whatev). Ass hat A charges no commission fee, but has a higher exchange rate, so you will get about 7 Euro instead of about 8.50 (what you would get with a good exchange rate). Ass hat B has a great exchange rate, but charges a $5 commission fee, so they will take out the $5 THEN convert the remaining $5 to Euros, leaving you with only about 4. Therefore, your best bet is to go with no commission fee (Ass hat A). If you are exchanging a lot of money (say, $1000), then you want to do the opposite because who cares about $5 in the grand scheme of things, you want the better exchange rate in that case (Ass hat B). Man, this is making no sense whatsoever, is it?
Dynamic Currency Conversion (DCC) - To be avoided at all costs, DCC is a "service" lots of stores, restaurants and ATMs will provide in which they have the cost of a transaction converted from local currency to dollars to make it easier for you (stupid Americans). This "favor" will cost you because they charge a fee each time, sort of like a foreign transaction fee. Just say no when they ask if you would like your transaction converted into dollars.
Bottom line, nothing is free people! But, there are ways to make your life a little less expensive if you follow these rules:
Wait until you're abroad to exchange your money and NEVER do it at the airport. One article compared it to buying a Snickers from a minibar.
Find an ATM, wait in line and use your 0% transaction fee debit card (and don't let them DCC you!). Take out a good amount of money and hide it in your money belt until you get to your hotel (and then hide it in the safe). Take out extra money for emergencies.
Use a credit card with a 0% foreign transaction fee. If you don't have one, use cash for larger purchases.
Sorry, this was so lame. Believe it or not, this is the Cliffs notes version. I just figured I did hours of super boring research, so no one else should have to suffer my same fate. Why yes, I have been compared to Mother Teresa, why do you ask?
Here's an adorable dog picture to settle your brain:
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