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Money tips for travellers

On the eve of a great trip, the bags are packed, the camera is loaded, the travel guides are in hand, and the last thing you're thinking about is how to save your money or convert it to foreign currency. So it pays to think ahead a little attention now can save you serious money in the long run.

by Stacy Kravetz

How to pay for things overseas

When dealing with foreign money, you have a couple of basic choices. You can convert all your money into foreign currency before you go, you can get travellers cheques or you can use your credit card or cash card.

The problem with getting a wad of foreign cash beforehand is twofold: you won't get the best rate of exchange and you'll be stuck on your trip carrying a load of cash, which is risky. If you plan to pay for things in cash, the better route is to get travellers cheques from a bank and convert them to cash as you need them. This way, if you lose them or if they're stolen, you can get them replaced and continue your travels. Plus if they end up in anyone else's hands, it will be tough for them to cash them because they require matching signatures and photo identification. The other option is using a credit card, which is discussed in more detail below.

How to get the best exchange rates

Let's start with how not to get good rates: walking naively up to one of the windows around town marked "Cambio," "Wechel" or "Exchange" and plonking down your money.

The only place worse than an exchange booth in town is the one at the airport or train station. These establishments profit from the convenience they provide, so if you land in a foreign country without a lira, drachma or yen to your name, and you need to convert some travellers cheques quickly to get to your hotel, you can bet the exchange counter is making a healthy profit out of your situation.

Avoid this by getting your currency from a bureau de change at a local bank before you go, which will get you into town where you can find a bank that will give you a better rate. Banks will exchange travellers cheques into the local currency, often without charging a fee. You'll generally get better rates at banks than at currency exchange booths on the street, and you can do a quick comparison before you change your travellers cheques.

Another way to get good exchange rates is to use your credit card. If you have a card and plan to pay the balance responsibly, use it when you travel overseas to get you a better exchange rate that you'll get almost anywhere. Credit card companies can get better rates than you can, so if you charge your hotel and restaurant bills instead of converting travellers cheques and paying cash, it will end up costing you less.

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