The best exchange rate for changing US dollars is obtained by always paying with a card since it is by far the most economical option. And for carrying some cash, the best option is to withdraw money from an ATM.
In other words, the best strategy to save as much money as possible would be to always pay with a card (as we will see later, in 2024 Wise card offers the best exchange rates and the lowest costs in the market) and only withdraw the amount of cash from the ATM that we will need.
Certainly, this technique to save the maximum amount of money on your vacations may surprise you because, after all, if you go to any currency exchange or bank, you will see how they advertise loudly that “there are no commissions” and therefore, one could simply think that the logical thing would be to exchange dollars for the current exchange rate and that’s it, right? Well, no! Everything has a cost, even paying with a card has a cost, even if they don’t tell you or you don’t see it at first glance.
I’m going to tell you a secret: this website was created by a group of friends who have worked for several years in currency exchange offices, and frankly, changing cash is the worst option by far. In fact, to give you an idea of the dimension of this bad alternative, you should know that most currency exchange operators or bank employees have discounts to exchange currencies compared to the exchange rates offered to customers. But even with that, we never exchange cash. At most, depending on the trip, only a small amount for certain payments or if it’s necessary to enter the country.
Therefore, it is clear: always pay with a card and only withdraw the necessary amount of cash from an ATM. Now let’s see how to pay the minimum possible cost in both cases:
What is the best card for international payments?
Based on the study we have conducted of all the cards available on the market for this year 2024, for making payments in any foreign country, travel cards have lower costs than bank cards, and among travel cards, Wise card provides the lowest costs.
These results are valid not only in terms of costs for international payments in foreign currency at stores (Wise would offer the best conditions, other travel cards would be on average 4 times more expensive, and bank cards on average 10 times more expensive), but also in the costs of withdrawing cash in foreign currencies from ATMs outside your country (Wise would again have the lowest fees, other travel cards would be on average 4 times more expensive, and bank cards on average 20 times more expensive).
Also, if you want to know the exact differences in costs and functionalities among the different cards you can find on the market in 2024, don’t miss our comparative study in this link. As you will see, this extensive study analyzes all types of cards (debit, credit, and prepaid) and all types of providers (banks, fintech companies, financial institutions, etc.).
Do we need to take our country’s cards abroad?
As we have mentioned, it is preferable to use the Wise card instead of a conventional bank card or other travel cards since you will save a significant amount of money when paying at foreign stores and when withdrawing money from international ATMs, paying the lowest possible fees.
Thus, initially, it would not be necessary to carry any other card, but keep in mind that if you are going to make payments such as car rentals, you will need a credit card since most car rental companies will retain an amount as a deposit and will only accept credit cards.
On the other hand, if you are not going to carry out these types of transactions, it is advisable to leave your bank cards with higher balances at home and only for security reasons, it would be advisable to carry an extra debit card with a small balance in case of emergencies (imagine that your other card gets damaged or stolen, and you also lose your mobile phone, so you would have nothing to pay with).
Keep in mind that in case of theft, there is a risk that fraudulent operations may be carried out with your cards up to their limits, while with the Wise card we recommend, your balance will never go negative, so only the deposited balance can be spent.
Additionally, you can instantly block your Wise card from your mobile phone, whereas with your bank cards, you may need to call your bank to cancel them, running the risk that they may not provide service at that moment due to being a holiday or outside customer service hours.
For all these reasons, when traveling, it is always better to carry a debit card like the Wise card with the amount of money you will need. If you need more, you can always reload it instantly through the mobile application, and if you want to block it due to loss or theft, you can do it instantly through the application as well. This way, you will have full access to your money at all times, without paying commissions for it and minimizing the risk of theft.
As you can see, this card has numerous functionalities through the mobile phone, so it is important to make sure your phone’s battery is always well-charged. To do this, remember that in many countries, the plugs are different. Therefore, it would be a very good idea to get a universal plug adapter for traveling since it can be useful for any trip you plan to take in the future. In this link, for a very affordable price, we show you a universal plug adapter, as well as other ideal and necessary products for traveling.
Finally, it is important to know that if you are going to take your credit card from your bank to pay deposits in operations such as car rentals, it is recommended to notify your bank before traveling abroad and inform them of the limits you will need. Keep in mind that all cards have daily, weekly, and monthly limits, and when traveling, you will spend more than usual, so if you have relatively low limits without knowing it, you could reach your limit and find yourself in serious trouble.
What to do if my card runs out of funds abroad?
If your debit card runs out of funds abroad, you can still obtain money in a very simple way:
- If you have a bank card, you should contact a family member or friend who is a customer of the same bank to transfer funds to your account. Transfers between accounts within the same institution are processed instantly, so once the transfer is completed, your card will be able to use the new balance in your account. Another option would be to make an “immediate transfer” between accounts at different banks, as these transfers are also processed instantly.
- If you have a prepaid card like Wise, you can reload it through the app (or someone else can do it for you) and receive the money instantly.
What should I do if all my cards are stolen abroad?
If all your cards are stolen abroad, here are some alternatives to help you get by:
- Use cash you have withdrawn from an ATM: You can pay with the cash in foreign currency in case you have made a withdrawal from an international ATM.
- Exchange your currency for cash: It is always advisable to carry some cash in your own currency in case of emergencies, as you can exchange it for dollars at currency exchange establishments if needed.
- Pay with your mobile phone: If your phone has NFC technology and your bank offers mobile payment services, you can link your mobile phone to your card, and even if the card is canceled or blocked due to theft, you can continue making payments with your phone without any issues.
- Have someone in your country pay for what you need: If you simply need to purchase a plane, train, or boat ticket, any contact you have in your country can pay for it online and send you the mobile boarding pass (or you can download it through the airline’s app).
- Receive money through money transfer agencies: In most tourist cities, there are numerous agencies that offer this service. In these agencies, any contact you have can make a transfer from your country so that you can receive the money abroad.
- Sell your jewelry at a gold buying store: In most major cities around the world, there are many gold buying establishments where they will buy any gold jewelry without any problems.
- Sell your higher-value assets at a second-hand shop: The most sought-after items and easiest to sell would be technological products such as phones or laptops, as well as high-quality clothing and watches.
- Ask for money: The easiest way to obtain what you need would be to ask fellow countrymen who can trust you. If you need a small amount, a perfect place to ask is near vending machines since everyone receives change from them, and when you ask, it’s very easy for people to give you something.
- Visit your Embassy or Consulate: As a last resort, the representatives of your country can provide assistance.
Where to find the best cash exchange for US dollars?
As we mentioned earlier, the cheapest way to obtain US dollars in cash is by withdrawing money from ATMs.
In any case, if you wanted to exchange cash for US dollars at a currency exchange or bank, an exchange rate with a margin of less than 5% compared to the official exchange rate would be a good rate. Between a 5%-10% margin would be an acceptable rate, between 10%-15% would be a poor rate, and beyond 15% would be usurious.
The official exchange rate of the US dollar against your currency can be easily found on Google. By subtracting the offered rate and dividing the difference by the official rate, you can calculate the percentage margin that is being applied to you.
Usually, highly trafficked areas in tourist locations are the worst places to exchange currencies, as they apply higher margins on exchange rates. Therefore, it is best to search online in advance for a reputable exchange establishment instead of going to the first one you see.
However, if you need to exchange a small amount of money, it wouldn’t matter much where you exchange it in case of urgency or necessity since it would involve assuming a small extra cost in the worst-case scenario.
How much cash is sufficient for travel?
Exchanging cash only serves two purposes:
- It serves as emergency funds in case your card and mobile phone are stolen, allowing you to at least get by: buy something to eat, make phone calls, travel to the embassy if you need to request a duplicate passport, and get to the airport to leave the country.
- It serves for making cash payments: at some street vendors, certain vending machines, and for paying for services such as laundromats, telephone booths, shopping carts that require coins, etc.
Therefore, depending on the number of days you will be traveling and your estimated cash expenses, you can roughly calculate the amount you will need, which in any case should not be a large sum.
Is it possible to know if the US dollar exchange rate will improve or worsen in the future?
Official currency exchange rates function like any other financial market, such as the stock market. While there are analysts and financial experts who make predictions, just like predicting stock prices, there is no concrete evidence to prove that anyone can accurately predict future prices.
Generally, foreign exchange rates tend to be quite stable, and within a month, they do not fluctuate much more than 5%, unless there is an unexpected economic or political event, such as the unforeseen victory of an opposition party with a groundbreaking economic program.