Managing money when traveling may not be the sexiest travel topic as it does not involve recounting places seen, accidental cool discoveries, or the most delicious dessert eaten.  However, it deals with a topic that many new travelers wonder about.  And not just only new travelers.  I have traveled quite a bit and my recent trip to Europe certainly made me stop and think on a strategy for all this.

Why?  If you have visited or will be visiting a region with multiple currencies, you will get what I had to deal with.  Here is my deal:  I was visiting 5 countries using 4 different currencies and spending only about 2-3 days in most of them.  I had to figure out a strategy.

Serbia had the dinar.  The Czech Republic had the koruna.  Austria and Slovakia used the euro.  Hungary had its forints.  That presented a challenge on what to do to not end up with a lot of unused local currency to either bring home or exchange back into my currency at some brutal exchange rate (where I would be on the losing end of brutal).  I am not one to just throw away good money!

Serbian dinars

Should one get foreign currency before leaving for the trip?

Before we get to my strategy.  Let’s talk about this which is important even if just needing one foreign currency…

Some folks like to be prepared and get currency for the countries they are visiting before they leave home.  That can be out of a sense of being well-prepared or because they are nervous about arriving somewhere without local currency.  I get those two concerns.  Or, it could be that they are fearful of using ATMs in another country.

I don’t exchange money in my home country before my trip for several reasons.  Firstly, one is charged more than one should spend doing it this way.  Not to mention that some of the currencies you may need (think Serbian dinar) may not even be available in one’s home country.

Secondly, I am not worried about using ATMs in another country as, in my experience, they are no less safe than ATMs in my own country.  Perhaps 20 years ago the concern was more valid (though I have been using ATMs internationally since the networks’ connectivity became available sometime in the 1990s), but in today’s globalized world and in regions like East Asia, Australia/New Zealand, South America or Europe there should be no concerns.

Thirdly, it is easy enough to get local currency upon arrival at another country especially when arriving via an international airport or major train station.

Czech and EU money

So how to get local currency in a foreign country?

Usually, there are ATM machines in most airports in the regions I mentioned.  However, there are two ATM types:  the ones affiliated with banks and the ones independent of those banks and just associated with some random network that costs more to use than using a regular local bank’s ATM.  I don’t want to name names here but if the most prominent label on the ATM has the word “net” in it, I would be suspicious…

Where can you find the ATMs?

• Banks’ ATMs are usually located in the public area after one passes customs and exits to mingle with those waiting for passengers arriving.
• Non-bank ATMs typically are found in the baggage claim area, almost preying on the overeager passenger, and sometimes in the public area too.

What I recommend and do (most of the time) is research ahead of time where the airport’s ATMs are located (most airports’ websites have this information).

Also search using your favorite search engine the names of banks so you know which are real banks’ ATMs.  Examples of banks include Raiffeisen, Ceska Sporitelna, CSOB, OTP Bank, Erste Bank, CIB Bank, etc.  Only use local banks’ ATMs!!

But is cash really needed abroad?  Are credit cards readily accepted abroad?

Great question.  Again, in the areas I mention and other countries outside of those, credit cards are generally accepted.  But even in the regions I cited, not everyone accepts credit cards.  In the heart of Vienna itself, for example, a not-small cafe we ate at did not take credit cards – and caught us by surprise as we were not paying attention.  Thankfully, ATMs were easily accessible in that area…

In addition, sometimes a purchase in a place that accepts credit cards is so small that cash payment is required.

Note:  When paying with credit cards, in many places one is offered to pay in U.S. dollars (at least for U.S.-issued credit cards) or the local currency.  ALWAYS go for the local currency as your credit card will always give you a better exchange rate than the local company handling the transaction will use to convert your tab to U.S. dollars!

However, besides those two scenarios and the note, there is also the topic of tipping which may further affect the need for having local cash…

Tipping abroad – how it works

Well, this is a topic for another post but, since many have written about it, I will only touch on a couple of points.

First, if you are from the U.S., please please understand that tipping like we tip at home is NOT necessary.  In many places, waitstaff is not paid minimum wage like at home so the need for tipping is more a courtesy or a show of gratitude than needing to help the person earn an acceptable living.

Secondly, though, tipping norms vary across countries (even in the same region!) and vary across services (taxis, bell boys, waitstaff, etc.).  So, it is best to read up ahead of time to understand what may be normal/expected in the country(ies) you are visiting.  In some places, just rounding up the bill is enough.  In others, 5-10% is typical.

Finally, there is the question of how can one tip.  Fun times…  In some places (I found this more common in Budapest than the other places), the service charge or fee is already on the bill which means that, if one pays by credit card, one does not need cash for tipping.  In the places where it was not pre-added to the tip, tipping may or may not be addable to the check (and, therefore, to the credit card) for a number of possible reasons so one may need to have cash available.  In Prague, it was hit or miss whether one could add the tip to the bill, making it unpredictable!

So how much local currency to get?

OK, having said all that, the question remains:  given the short time spent in each country, and with varying considerations, and not wanting to have to exchange money back, what was my approach?

Let me start by explaining that I have a good situation with my bank.  My bank does not have its own ATMs at home so I am always forced to use other banks’ ATMs when I do get cash.  Therefore, my bank’s policy is to refund all standard ATM fees I incur.  This played into my strategy on how to manage currencies in this trip.  I would withdraw a slightly smaller amount than I thought I needed on the first day. That was knowing I could withdraw more at another time, without incurring more costs, if I learned that credit cards were not as accepted in the places I visited, or if I needed more cash for tips, taxi rides, or small purchases.

Another aspect of my approach was that, since I was traveling with my cousins and uncle, instead of each of us facing the same dilemma, we would keep it to one of us withdrawing cash and pooling our “cash needs” since some of those expenses would be shared.  This would also reduce the fees assessed and likely leftover cash.

Managing my money when traveling on this multi-currency trip:  how did it go?

In the end, if you decide to use ATMs and have to pay the ATM fees, the tradeoff is taking the risk of one more withdrawal’s cost vs. the likelihood of ending up with leftover cash to exchange.  That is a decision that different people will handle differently.  In our case, this all worked out very well and we rarely ended with too much cash outside of local currency I wanted to bring home for family’s and friends’ kids!  Success!

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