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7 Currency Exchange Secrets to Know Before Your Next Trip

A few transaction fees here and there really do add up. Luckily, there are many ways to avoid them.

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Euro money – Euro cash backgroundBreno Saturnino/Shutterstock

Before you go

It’s your mother’s favorite piece of advice: always carry cash. That holds true in foreign countries, too—especially if you’ve got to take a taxi or buy a bus ticket once you arrive (since the number one place you do not want to exchange money is at the airport). Shop around at stateside banks to find the best exchange rate with the lowest fee. You’ll also want to avoid online currency exchange services and kiosks near popular tourist attractions. “They often charge the highest fees to exchange currency, leaving you to pay for the convenience,” says Joe Cortez, travel rewards expert at NerdWallet. Here are 15 more things you should never buy at the airport.

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7 Currency Exchange Secrets to Know Before Your Next TripOleg Znamenskiy/Shutterstock

Invest in a credit card for travel

One of the easiest ways to save on currency exchange is to get your credit card to do the heavy lifting for you. That means opening an account that takes no foreign transaction fees. Favorite cards among frequent travelers include Chase Sapphire Preferred and the Charles Schwab High Yield Investor Checking Account (which refunds every ATM fee, even those made abroad). Capital One has no foreign transaction fees on any of its cards. Here are 10 more ways to use credit cards to upgrade your vacation.

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Close up of man taking cash from ATM with credit card.nenetus/Shutterstock

Withdraw a healthy chunk of cash

Most ATMs you encounter abroad will charge a foreign transaction fee (usually 1 to 3 percent of the purchase amount) as well as an international ATM fee (usually a $1 to $5 charge from your bank for using an international ATM). Keep fees to a minimum by withdrawing cash just once or twice during your trip. Make sure you save on your flight too with these 16 secrets to scoring the best airfare.

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Old toothbrush with mixed money inside brown reused paper envelope on grey cotton fabric tableHoneybee49/Shutterstock

Budget your cash like this

While you will want to take out a chunk of cash at the beginning of your trip, you won’t want to carry it all in your wallet. Alexa von Tobel, CEO and Founder of LearnVest, has a strategy that can help you stay safe and on budget. “After the initial investments of transportation and hotel, set a daily budget for expected food, drink, activities and souvenirs/shopping,” says von Tobel. “Inflate the number by 10 percent to 15 percent as a cushion for small emergencies or unforeseen expenses. Once you arrive at your daily allowance, set aside that amount in separate envelopes for each day and stash the envelopes in the hotel safe. Each day, use only what’s in one envelope and save your credit card for emergencies. If you must use your credit card, remember your daily allowance and calculate in your head if you’re staying within range.”

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Hundred dollar billsOlena Bloshchynska/Shutterstock

Never pay in U.S. dollars

“One trick merchants often use to pad their sales is offering travelers the option to pay in U.S. dollars instead of the local currency,” says Cortez. “While it may seem more convenient, it is also a trap: paying in dollars adds exchange fees to the bill, resulting in overpayment from the traveler.” Instead, pay in the local currency with either cash or a credit card with no foreign transaction fees. Stay aware of these 10 money traps you fall for every time your travel. 

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Hand is holding tag label on modern design blue shirt isolated on white backgroundTanasan Sungkaew/Shutterstock

Know how much you’re spending

It might be tempting to guestimate how much an item sold in euros will cost in dollars, but there’s no doubt you’ll get it wrong. And if there’s one way to ensure you blow your budget, it’s by not knowing how much you’re actually spending. Download a currency converter app to your phone and use it to see how much you’re actually forking over. A 65 euro sweater might seem less appealing when you realize it’s actually $74.

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US passportDmytro Surkov/Shutterstock

Keep your cards safe

Saving on currency exchange is one thing, but it means very little if you’re not taking a few precautionary measures. “Cash, cards, and passports are all keys to your identity and should be treated like any other valuable you can’t afford to lose,” says Cortez. “Be sure to keep copies of all your cards and passports on you as you travel, and in the hotel safe once you arrive. In the event they get lost or stolen the copies can be used to reduce fraud and stop cards immediately. Some credit card providers may be able to overnight a new card to your hotel if it gets lost or stolen.” Next up, memorize these 16 things to never forget when traveling overseas.