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When you are looking to use your dollars when traveling, it’s important to understand how exchange rates work. Whether you are at the airport making a purchase or buying currency online, it’s easy to get caught up in additional fees and spend more money than necessary. Educate yourself ahead of time on how to best exchange local money when traveling overseas, rather than fall into the trap of additional costs.


Use your credit card.

You can use your bankcard overseas just like you do at home to pay for purchases including hotels, food, and other big ticket items. Be aware that card issuers will often add an additional two to three percent for international transactions. Don’t use your credit card to take money out of an ATM. You’ll be charged both a transaction fee and ATM surcharge. Plus, interest begins adding up from the day of the advance.


Use your debit card to withdraw cash.

Most American debit cards can be used to withdraw currency from international ATMs. Additional fees ranging from three to eight percent may be added onto the transaction, depending upon your bank.


Order cash at your bank.

Most banks sell foreign currency and if you have an account you can arrange to pick it up at your local branch before your trip. Delivery fees apply with this option, but given enough time to process, it can be a reasonable charge.


Purchase cash online.

You can buy international currency from a variety of websites that will ship it to you via a secure delivery service. These delivery fees can be high.


Buy traveler’s checks.

These act just like American cash and can be replaced if they are lost or stolen. They do have to be exchanged for local currency when you arrive and you’ll be assessed exchange fees. They are a viable option for people who dislike carrying large amounts of cash.


Prepaid foreign currency card.

Introduced by Travelex in 2007, these cards can be preloaded with a set amount of either Euros or British Pounds. There are a large number of fees associated with using the card for withdrawals; if you don’t use it for a time and to close it.


Exchange desks.

Hand your dollars over to a clerk at one of these desks usually found at airports, hotels and in city centers and get local currency back. Fees are high for this service, sometimes amounting to 20 percent of the transaction. Use this as a last resort.


Regardless of the method you use to exchange foreign currency, don’t forget to inform your bank and credit card companies that you’ll be visiting abroad in the first place. It’s extremely easy to get locked out of your account if they suspect fraud or stolen information, so avoid that possibility by giving them advance notice.