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Currency

Currency

Since the Pacific Rim Alliance plans a number of trips outside the USA, we thought it would be useful to understand how to convert our US dollars to another currency. There are several ways to get access to money while abroad -- ATM cards, credit cards, traveler’s checks, cash, MoneyGram, or Western Union. Don’t rely on just one of these methods to access money. Rather, plan to use a variety of ways so that in case one method does not work, you can fall back on another.

Whenever possible, we recommend using a credit card that does not charge a fee for international transactions for purchases. For cash, we recommend using your ATM card and withdrawing the daily maximum allowed by your bank [usually $300 USD] at one time. Don’t forget to save some cash for food and departure taxes for the return trip.

To determine the latest value of the dollar go to xe.com or x-rates.com.

Credit Card
Some US credit card companies are tacking an extra 2-5% fee on international transactions. This is not a currency exchange commission because that is already being taken out at 1-2%. Not all cards charge the same fees, it's up to the bank who handles the card.

With the loss of income because travelers are no longer using traveler's checks, card companys are looking for new ways to make upwards to 10% on your card -- in addition to charges for interest, cash advances (2%+), late fees ($25+), payment by phone ($10-$25+), etc.

Some tips on how to minimize your surcharges --

  • Check with you VISA or MasterCard about fees added for foreign currency transactions before each trip. Don't be surprised if the first person you talk to doesn't know what you are talking about.
  • Shop around for a credit card that charges a low or no fee for currency exchange. We have found there is one Capital One card that offers this service. Check the disclosure statement because Capital One has some cards that do not offer free currency exchanges. Of course, for these cards you probably won't be able to earn miles, cash back or other bonus.

ATM Cards
Of course you will need to have some ready cash for meals on the slopes, transportation, snacks, gelato, etc. We recommend getting cash upon arrival in the city using your bank card at a bank machine.

In many countries it is possible to use ATM machines to obtain local currency. ATM networks such as Cirrus and Plus seem to be the most widely available. Check with your bank to make sure that your card can be used internationally. Bank card withdrawals are debited (in dollars using the market exchange rate) from your US bank account directly, while credit card withdrawals are charged against your card.

Service charges are usually minimal with bank cards, but considerably higher with credit cards. Credit cards may also assess interest charges. Where automatic tellers are not yet available, you may charge advances of local currency against a credit card at banks displaying a VISA or MasterCard symbol.

Check with your bank to find out what the per transaction fee for foreign currency withdrawal is. In addition, ask if there are any hidden fees on the exchange rate.

Cash or Traveler's Checks
Converting cash or Traveler's Checks into foreign currency does not give you as good an exchange rate as you will get by using your credit card or ATM.

Try not to exchange money in hotels, restaurants, night clubs or shops. They will charge high commissions and are not required to give the daily exchange rate. Banks and foreign exchange shops will give you a better rate. Most locations will charge a slightly higher commission for Traveler’s Checks than cash.

Likewise, cash is usually easier to exchange on the street than checks if you find that you have run out of local currency. For this reason, it’s always a good idea to take some US cash in addition to your credit card, ATM card, and some traveler’s checks.

MoneyGram or Western Union
If you are in dire need of money, a friend or relative can send you cash through wire transfer services offered by MoneyGram. There are 26,000 MoneyGram agents throughout the world. Common agents are grocery stores, hotels, and convenience stores. Your friend in the US goes to a sending location, pays a fee, and gives the agent cash in the amount you need. The sender is allowed a free 10 word message and, to some locations, a free phone call to tell you the money has been sent.

The money will be available for you to pick up in the foreign country at a receiving location within a short period of time. You may have to pay a fee as well. Make sure to bring ID to pick up the money. Call 1-800-666-3947 or visit MoneyGram to find out about fees and sending and receiving locations.

Western Union functions in the same way as MoneyGram. Call 1-800-325-6000 or visit Western Union to find out about fees and sending and receiving locations.

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