20 Second Advisor: Get the most bang for your buck travelling overseas
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.
- Pay with a credit card with no foreign transaction fees (determine this by calling your bank);
- 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)
- 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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