How to pay when you're traveling abroad
International travel can come with a unique set of challenges. Here’s what you need to know about foreign transaction fees, exchange rates and cash vs. credit while you’re in another country.
Be smart about foreign currency
One of the best ways to get a good deal on foreign currency is to purchase it through your bank before you leave. As part of this process, make sure you’re aware of the exchange rate of the local currency where you’re traveling. This will help you make smart shopping choices: Many local merchants will accept U.S. dollars, but these merchants often assume a specific exchange rate that could cost you more. When in doubt, trade your dollars ahead of time and pay with the local currency. You may also get a better exchange rate if you make purchases with your credit card, though you’ll have to be mindful of foreign transaction fees. If you’re having trouble deciding between the two, we tackle that in tip No. 2.
See Bank of America exchange rates for ordering foreign currency online.
Have a cash-vs.-card strategy
How often you use your credit card may depend largely on whether your card charges a foreign transaction fee and how high that fee is. Many credit cards charge a foreign transaction fee every time you make a purchase abroad. Considering that, you may want to use local currency for smaller purchases, such as coffees and snacks, and your credit card for more expensive purchases, such as pricey souvenirs and restaurants.
Tip: Don’t forget to set a travel alert on your credit card so your bank doesn’t suspect fraud when they see foreign charges. Also keep in mind that some foreign terminals may ask for a PIN when you use a credit card. For more information, check out our travel checklist.
Be prepared before using an international ATM
Before using an international ATM, it pays to do some research, as you could be charged fees. These include non-bank ATM usage fees, ATM operator access fees and international transaction fees for currency conversion. These fees can be charged by both the foreign bank as well as your bank, but you may be able to avoid or limit some of them by using ATMs of banks that partner with your bank. You can usually find these by doing some research ahead of time.
You may be able to minimize some charges. For example, if you’re a Bank of America customer, Bank of America will assess an international transaction fee of 3 percent of the converted U.S. dollar amount. Foreign ATM operators may offer to do the currency conversion for you, but they may charge a higher conversion fee. You can refuse the foreign ATM conversion and be assessed the 3 percent Bank of America international transaction fee instead. Fee policies vary by bank, but wherever you bank, doing some research on these issues will ensure you aren’t surprised.
Tip: Before you leave, check your PIN number. Some international ATMs only support four-digit pins. Be sure your pin doesn’t start with a zero and know your pin by its numbers, since some international ATMs do not have letters on the keypad.
Bank of America customers can search our list of international partner ATMs.
Know your options for leftover currency
Many people can’t predict the exact amount of foreign money they’ll need; you may end up with excess cash at the end of your trip. There are a number of ways to keep it from going to waste. You may be able to apply it toward your hotel bill or your final meal, and then pay the remaining amount by credit card. If you’d rather give the money to charity, there are often donation bins at airports. You can exchange foreign cash back into U.S. dollars (though the exchange rate will likely be different and you may pay a fee), or consider giving it as a gift to friends who plan to travel.