Should I get local currency exchanged in advance, or upon arrival? Should I get traveller’s cheques? These are among the most common questions asked by travellers. It is always advisable to have some local currency upon arrival in your destination if you can. How much depends on where you are staying, how far away your hotel is from the airport, and the type of hotel where you are staying. The answers to these questions have less to do with the best exchange rate and more to do with convenience and security.
If you are going to an all-inclusive resort within an hour’s transfer from the airport, and the transfer is provided, having lots of local currency is not really necessary. You will want to have enough to cover taxi fares to your hotel in the unlikely event that your transfer is not provided. Enough local cash for some meals, tips for the bellman for delivering your luggage, and your first taxi ride to a bank are common expenses. If you are planning on stocking up a fridge before arrival, you should account for that as well. Many small shops and restaurants outside North America do not accept credit cards, even in Europe, which we Canadians and Americans find a bit backward. Be prepared for this if you are planning to do some shopping and dining outside of your hotel.
Think of your worst case scenario in advance. If everything goes wrong, how much cash will you need in order to get to a bank and make a credit card withdrawal or interac advance from home? If you have a credit card that is nearly maxed out, or has a low limit, you should have more cash and traveller’s cheques to back you up. If you have more than one credit card with good limits, and in particular not just an American Express or Diner’s Card, but a more widely accepted card such as Visa or Mastercard, you are not as dependant upon cash and traveller’s cheques.
Traveller’s cheques are great for protection against theft, but only if you keep your receipts with the cheque numbers on them in a different place from the cheques themselves. Make sure that you sign them only in the presence of the merchant who will accept them, and find out about their acceptance before you sign one. These are becoming less and less used.
Interac/ATMs (Automated Teller Machines) are available in more developed destinations and in urban areas. If your hotel is isolated or the country you are visiting is not highly developed, you cannot count on Interac. Debit card usage in shops and restaurants is not nearly as popular outside Canada. Do not even count on using a debit card overseas, other than for withdrawals at an ATM. You need to find a machine that is on either Cirrus or Plus networks for acceptance. Remember too, that your bank sets weekly withdrawal limits on your ATM card or may deactivate it without notice when you try and use it overseas.
It’s best to call your credit card and bank before you leave and let them know where and when you will be traveling. This way, when they see charges coming through, they will not disable your card temporarily for fear of fraud.
Many people spend a lot of time worrying about the exchange rate they will pay on currency conversion. Keep the amount of money you are exchanging in perspective. On a $200 exchange, a 2% difference in exchange rates is only $4. Scouring the streets for the best exchange rate is a waste of time. The biggest savings will likely be in advance, at your own bank or currency exchange bureau, or through an ATM. The biggest mistake people make is exchanging too much money, and losing on the exchange back into their home currency.
The best advice is to have a blend of some local currency for arrival and emergency backup, some traveller’s cheques for security, your Interac or ATM card, and a Visa or Mastercard with ample credit limit.