Where Should I Exchange My US Dollar To Local Currency?
Since we’re based in the United States, we can only speak based on US dollar and all of this is solely based on our experience and you may have different experience than us.
One of the most important thing that you need when you travel is always having local currency at all times as not all places accept cards either debit or credit card, for instance if you want to tip the bus driver, concierge, etc. Now the question is where to get the best exchange rate when exchanging your USD to your destination’s local currency.
Often the best place to exchange your USD to local currency usually is via your local bank or credit union, make sure to check their rates and compare it with others. While there is a fee that you have to pay (usually between 1% to 3%) the exchange rate tends to still be better than exchanging like in the airport. Some banks like Bank of America or Citi Bank can waive the fees if you exchange a minimal of $1,000 USD (as of this writing), so make sure to check with your local bank or credit union.
The downside with exchanging in your local bank depending on its location at times you will not get the foreign currency on the spot, you may have to wait a few business days (usually between 24 to 72 hours). Depending on when you receive the money the exchange rate will most likely change, it may benefit you or it may not depending on the rate for that day. Despite this, it is unlikely that difference is going to be that big so even when you lose it won’t be that much unless you exchange a huge sum which you should avoid as there are better ways to go about it which we will discuss later.
However depending on your destination, for us in the past the rate at the destination airport were better than the local bank on the same day comparison. One was when we travel from Australia to Bali, the rate at Bali’s I Gusti Ngurah Rai International Airport were better than the local bank in Australia (at that time was ANZ Bank) and when we travel to Japan the rate at both Narita and Haneda Airports are better than our local banks (Bank of America and Chase).
Now if you want to bring a huge amount of your destination currency the best way is not to exchange them all and carry them all over for so many reasons such as theft and limits on how much you can bring into your destination country (you have to check the limit otherwise you might get into trouble).
Our suggestion is to bring your credit or debit card(s) that has no foreign transaction fees, while the exchange rate may not be that great but the zero fees will help quite a bit. Use your card for any purchases on places that accepts card payment (make sure to inform your card issuer that you will be travelling on the dates that you are traveling to prevent purchases being declined).
As for how much cash you should bring, there is no exact answer as everyone’s plan and budget are different but you do not want to bring too much or too little, this is why we love Wise’s Debit Visa.
What is Wise? Wise is an account where you can hold money in 40+ currencies, and convert between them at the real exchange rate whenever you need. It’s free to sign up, and there are no monthly fees. You can join using our referral link here or click the picture below and get zero fees on a transfer up to $600.
It is very easy to use and the exchange rates are very good, I’ve used it in Japan, Singapore and Indonesia for both purchases and ATM withdrawals from local ATM with very minimal fees that you check before hand. So far it has not disappoint us and we’re very happy with it, we’ll write a separate review blog just for Wise in detail in the near future.
How about exchanging currency outside the airport at foreign exchange stall or counter? If you ran out of local currency and really need to get it and don’t have Wise card then you have no other option then you sure can do it, here are a few things to consider:
Always do it in a safe area and reputable foreign exchange, while this is not as easy as it sounds you can use your judgement and common sense by checking the surroundings
Always check the rate and make sure you’re not getting cheated, in Singapore the rate of exchange was better on the outside than inside the airport (at least this was the case on our last trip)
In Southeast Asia, many countries loves new and crisp $100 bill. Some exchanges will not accept older bill and if they do they will buy it a lower rate, they also do not like worn bills and often will reject it or willing to buy at a much lower rate
Make sure you do not leave the counter until you count your money and everything is there, while you would expect foreign exchange place to be honest unfortunately this is not always the case. Even if they are, there is always a possibility of human error. What we recommend is if you’re exchanging just a very small amount of $100 bill, take a picture of the serial numbers and if they touched your money and you lost view of it and decided not to do the exchange for whatever reason then check the bills that are returned to you and make sure that it matches the one you gave them
We will give more details specifically on Japan, Singapore and Indonesia on future blogs so make sure to follow us and check back from time to time.