 For the best rates, you should exchange your cash or travelers checks at the
bank. Airports, train stations, hotels and restaurants usually charge higher
rates.
But the best rate of exchange may be by using your credit or debit
card. Rates on your credit card are very competitive because they're based on
wholesale rates offered only by major banks. The downside are the ATM fees.
Credit and debit cards also have other benefits. Most major credit cards
offer protection against fraudulent use and even offer different types of
travelers insurance. Credit cards will also allow you to enjoy your vacation and
spread out your actual payments.
Debit cards work like credit cards, but the funds are immediately deducted
from your account. The benefit of using a debit card is that you'll keep a
better eye on your budget.
As a last resort, you can get a cash advance on your credit card. This should
be used only in emergencies because banks will charge you very high interest
rate. Also, most countries use a four digit PIN, so make sure in advance that
your credit or debit card can handle international ATM's.
How about traveler's checks? Traveler's Checks are great for cities such as
London, Paris, or Hong Kong, but if you plan on visiting small towns and
villages, its best to carry cash.
Finally, you should exchange a little amount of money before you leave from
your local bank. That way you won't need to exchange any money at the airport or
hotel when you first get in. Also, make out a few traveler's checks in smaller
amounts so that you don't get stuck with a lot of foreign currency when you get
home.
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