Travel tip #49 - Exchanging your dollars for foreign currency (Euros)

     If you are traveling to Europe, you are probably going to need Euros. Why probably? Well, many European countries still use their own form of currency. However, 19 of the 28 countries in the European Union use the Euro as their official currency, including most of the popular tourist destinations: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, 
Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The EU countries which continue to use their own national currency are: Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, and the United Kingdom. Of course, there are still other countries who don't even belong to the European Union, such as Norway and Switzerland, which also use their national currency.
      Although coin collectors may not appreciate the advantages of a single currency, it does make it easier for travelers. Rather than exchanging your currency every time you enter a new country, you can just continue using Euros. Now you might be thinking, "I've traveled to several countries and have been able to use the U.S. dollar wherever I've gone. If I need cash, I'm sure they'll take them in Europe too." Although there are places in Europe that will take dollars, most of them are professional currency exchange stations, and their primary goal is to make money. They make money by buying your dollars at one rate, and then turning around and selling them to people needing dollars at a different rate. If you bought $100 worth of Euros at one of these places, and then turned around and sold your Euros back for dollars, you'd probably get less than $90 back. That's why most business won't accept dollars or other foreign currency. If they have to exchange it into Euros, they take a significant hit.
     Your next thought might be, "Okay, I'll just use my credit card everywhere I go." Although that will work with most hotels and large purchases, it won't work for small purchases. Since credit card companies are out to make a profit too, many small businesses won't accept credit cards for purchases under a certain amount because the credit card charges will eat up all their profits. Also, many credit cards charge extra fees for foreign transactions, so you might want to look into your card's policy before deciding which one to use when traveling abroad. The same thing goes for debit cards  - some banks will charge a foreign transaction fee while others won't. Make sure you know your bank's policy before you leave.
     So how should you go about exchanging your money without paying exorbitant fees? First off, the best place to purchase Euros or other foreign currency is through your bank. Although banks will make profits off of currency exchanges too, their top priority is to keep you as their customer, since that will benefit them more in the long run. Therefore, their rates are going to be much more reasonable. If your bank has international branches, find out if they'll have conveniently located ATM machines in the cities you'll be visiting, and what the charges will be for using them. If not, you should make an educated guess regarding how much cash you are going to need. If you guess too low, you'll end up exchanging more money at a bad rate. If you guess too high, you're going to have too much left over, which won't do you much good unless you plan on returning soon. Once you've calculated how much you need, purchase the amount from a bank before you go. If your bank doesn't sell foreign currencies, find a nearby one that does. You may need to place the order ahead of time since many banks don't keep a supply of foreign currency on site. So don't wait until the last minute! If you forget to do this until it's too late, there are other options; but some are better than others. Some of the biggest traps are: exchanging your money at airports, hotels or Travelex counters (all of which are notorious for offering lousy rates), using a prepaid debit card (which comes loaded with fees), or withdrawing cash from an out-of-network ATM (for which you will end up paying charges to your bank, the bank that owns the ATM, and foreign transaction fees).
     So, be smart and plan ahead to eliminate this potential stress so that you can enjoy your vacation. After all, you've already saved up your money to pay for it once; you don't want to have to keep paying for it once you return. Happy travels!