Foreign Currency for the International Traveler

What happens when I exchange currency with a friend? 
What about commercial foreign currency exchanges?
What is the difference between open and closed currencies?
Should I get foreign currency before I leave the US?
Where should a tourist change money?
What about ATM's, credit cards and banks?
What about stand-alone change offices and hotel front desks? 
What should I do about foreign coins?
What should I do with any left over foreign paper money? 
Should I get an electronic currency calculator?

Special page with information about the European Monetary Unit also known as the Euro

What happens when I exchange currency with a friend?

The very best foreign currency exchange rate you can find anywhere is to exchange with a friend. In this case the money is exchanged at the "current" rate and neither party makes any profit from the deal. This is similar to asking for five one-dollar bills in exchange for one five-dollar bill. You both break exactly even.

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What about commercial foreign currency exchanges?

In any commercial foreign currency exchange the commercial establishment will make some profit from the exchange, meaning you, the customer, pay for the service of changing currency. The amount you pay for this service depends on where you change your money. Remember the higher-priced money exchange services tend to be, also, the more convenient.

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What is the difference between open and closed currencies?

The currencies for many countries in the First World are open currencies, that is, they are traded freely on the open market. Developing, Communist and former-Communist countries are often closed currency countries, meaning your dollars (pounds, euros, etc.) can only be changed within the country at official government banks and change offices. In such cases, the "official" exchange rate is usually substantially worse that the "unofficial" rate, also known as the Black Market. Depending on the political and economic situation of the country, the Black Market rates vary widely from the official rates. Bear in mind that, in general, the wider the difference, the greater the legal penalties for trading on the Black Market. You are well advised to follow local law and rely only on official currency trading offices while in a closed-currency country.

If following the local law makes things too expensive for you, then vote with your feet and visit other, more accomodating, countries.

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From now on in this discussion, travel to an open-currency country is assumed.

Should I get foreign currency before I leave the US?

Before leaving you should consider getting some foreign currency to carry with you on the trip. $100/person is a round number, however if you plan to take expensive taxis to your hotel, are traveling with a large group or family, or otherwise incur a great deal of expense upon arrival, you will need more, of course. You should also take some US greenbacks for emergencies. Make sure that every adult in your group has their own supply of local currency.

If you have local currency cash with you on arrival you can deal with situations such as:

• Your greeter is not there and you need to make phone calls or take a taxi
• You want to buy a bottle of water, a sandwich or other snack
• Your Palm Pilot battery dies on the airplane and you can get a quick replacement in the airport shop
• Your watchstrap breaks on the airplane

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Where should a tourist change money?

 In general, the following are places the tourist can obtain foreign currency from best to worst:

• ATM
• Credit Card
• Bank
• Stand-alone change office (Bureaux de Change, Wechsel)
• Hotel front desk

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What about ATM's, credit cards and banks?

The wise traveler will get cash from ATM's for smaller purchases and will put large purchases on her credit card. Note that traveler's checks are no longer recommended in most first-world countries. The wide availability of ATM's and acceptance of credit cards have almost eliminated the need for traveler's checks in developed countries. If you have to change greenbacks, a local bank is your best bet.

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What about stand-alone change offices and hotel front desks? 

Stand-alone change offices and hotel front desks should only be used for changing small amounts as a convenience. If, for example, you only need to change about $30 for the morning taxi to the airport, changing money at the hotel front desk would cost more than a bank in the exchange rate, but would save you the hassle and taxi fare of going to and from a bank. Remember, also, that larger hotel front desks are usually open 24/7 while banks are not.

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What should I do about foreign coins?

Bear in mind that, with some exceptions, coins stay in their country of origin. If you bring foreign coins home from your trip you will not be able to change them into dollars and cents. As an example, if you go to your bank before your trip to change $100, you will be given paper money and US coins in change. Upon arrival in the foreign country, you go to a bank to change $100, you will be given paper money and foreign coins in change.

An excellent option is to try to use any leftover foreign currency against your hotel bill, then paying the balance with cash. Our thanks to Bob Knepper for this tip.

Therefore, as you approach the end of your trip try to spend your coins. If you find yourself in the airport with unwanted foreign coins, there are several attractive options:

• Give them to a charity that accepts coins and paper money in all denominations. Most airport waiting lounges have prominently displayed charity collection bowls.
• Give them to a child, first asking permission from the parents. No kid turns down free money.
• Give them to your host.
• Keep them in a plastic bag at home in hopes there will be a "next trip".
• Give them to a coin-collecting friend, or start your own collection.

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What should I do with any left over foreign paper money? 

As for your paper money, you have the choice of changing it back to dollars at your bank when you return or just hanging on to it. If there is any chance of you or someone you know returning to that country, then hang on to it. When you change money with a friend you will both get the best exchange rate of all. Alternatively, donate it to one of the charities in the airport waiting lounges that accepts all denominations of currency. 

Note that countries in "Euroland" changed to the Euro currency Jan 1, 2002. See the special page on the Euro for more information.

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You can buy small, inexpensive battery-powered currency calculators. These are handy for folks visiting several countries with different exchange rates. An easy, low-tech alternative is to make your own currency chart on a small piece of paper, then carry it in your wallet. Referring to such a chart will give you a rough idea of the equivalent dollars to a price in the foreign currency. Here is an example for an American going to the United Kingdom when the exchange rate is $1.51/£1.00:

08/09/2003