The strong American dollar is the upside of a volatile economy. For U.S. travelers headed abroad, that may help make up for the rising cost of travel.

For example, the exchange rate with the euro is about $1.04, meaning each 100 euros will cost about $104. One euro was worth about $1.22 this time last year. The present rate is down significantly from its high in 2008, when each euro was worth $1.58. This means that spending abroad is cheaper. 

Here is how to make the most of a strong dollar abroad.

  1. Pay with a credit card with no foreign transaction fees (determine this by calling your bank);
  2. Withdraw cash abroad, if needed, via an A.T.M. in the local currency (and skip the currency exchanges at airports, which offer poorer rates)
  3. And always select the local currency on a credit card purchase if offered a choice between it and U.S. dollars.

By dealing in the local currency, you are avoiding what is known as dynamic currency conversion, where a merchant lets you see the cost in your national currency and may be trading on your ignorance of the official conversion rate.

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