Travelling internationally? How to order foreign currency ahead of time.

Do you have a big international trip on the horizon? Before you go, consider converting some of your money into your destination’s local currency before you leave. Airport exchange rates are often unfavorable, and you might need cash to take a cab or grab a bite to eat when you arrive.

Getting foreign currency in advance can also help you avoid scams targeting tourists. Regardless of the destination, carrying some of that country’s currency can help you be prepared and protect you against scams. Follow this step-by-step guide so you’re ready when the big day arrives.

Buying foreign currency before taking an international trip can be convenient. Follow these steps to ensure you have cash in the correct currency before you start your journey:

Identify your destination: While some countries have common currencies like the euro, many have their own unique currency. Knowing your destination will help you identify the currency you need.
Research exchange rates: Some currencies have values similar to the US dollar, but others can differ substantially. If you know which currency you need, look into its exchange rate with the dollar.
Compare rates at currency exchanges: Check rates for your currency at your bank, local currency exchanges, and online currency exchange services. If you plan to convert a lot of cash, a seemingly small difference in fees can be significant.
Place your order: After determining who has the best exchange rate, place your order. You’ll need to share a few details, such as the currency you want to buy, the amount, and the delivery method. For instance, physical locations may let you choose in-person pickup or home delivery.
Confirm your order and pay: Before you complete your order, double-check the exchange rate and confirm it matches the rate you expect. If it does, confirm the order and make your payment.

If you place a currency order in person, ask the representative if there are any transaction fees or delivery charges. If possible, use a fee-free payment method, such as a bank transfer or debit card, when paying for your order. Keeping fees low is always preferable, so it’s a good idea to check for extra fees at each step.

We’ve discussed some reasons you would want to buy foreign currency beforehand, but there can be pros and cons, like all financial services.

Pros

Convenience: Buying foreign currency in advance allows you to pay for transportation, meals, and tips as soon as you arrive.
Avoid high fees: Having foreign currency beforehand can help you avoid paying high fees at the destination airport or an ATM.
Avoid scams: Buying foreign currency ahead of time can help you avoid scams. For instance, you could unknowingly buy counterfeit money or pay terrible rates without realizing it.
Be prepared: Some merchants may not accept card payments while abroad. Having foreign currency helps ensure you will always be able to pay.

Cons

Rate fluctuations: If the foreign currency weakens compared to your currency between your trip and when you buy it, you could lose out on potential savings.
Fees: Banks and currency exchanges charge fees for converting currency, which can sometimes be a significant expense. You may be able to save money by using a credit card with no foreign transaction fees and pulling out cash at local ATMs.
Time and planning: We’re all busy, and you must take time out of your day to buy foreign currency. But more than that, processing an order for a foreign currency can sometimes take a few days, so you may not be a viable option at the last minute.
Carrying cash can be risky: Replacing lost or stolen cash is all but impossible. So it can be dangerous to carry a lot of cash, especially when traveling to countries where pick-pocketing is prevalent. However, you can reduce your risk by limiting the cash you carry and keeping it hidden when you’re out and about.

There are certain steps you can take to get the most value from your conversion. One of the most important things to do is to research exchange rates.

Rates change frequently, and you never know what the future holds. Still, monitor rates in the weeks leading up to your trip and compare them to previous rates. If you find that at a certain point, rates are favorable compared to where they were in the recent past, it may be a good time to go ahead with your foreign currency purchase.

Once your trip begins, another trick is to always pay in the local currency if you’re using a card. Some merchants may offer a dynamic currency conversion (DCC) when checking out, but this often comes with unfavorable exchange rates and additional fees. You can always do a quick calculation on your phone to see how much the total is in US dollars to avoid this costly service.

You can also carry a travel credit card to complement your cash. Not all foreign stores accept card payments, but many do. Carrying a card with no foreign transaction fees can help you reduce reliance on cash and pay less in currency conversion fees.

While carrying at least some of the local currency on you is a good idea, there are a few drawbacks to ordering foreign currency ahead of time.

One simple alternative is withdrawing local currency from an ATM in the destination country with your debit card. This means you’ll be without cash at the beginning of your trip, but ATMs often have competitive conversion rates and are usually widely available. (You may want to avoid ATMs at the airport and other major tourist destinations, as they will likely have higher fees.) If possible, use a debit card that doesn’t charge foreign transaction fees, which can save you around 3% with each withdrawal.

You can also rely on a credit card for spending while traveling. This reduces the need to carry cash, and credit cards have strong fraud protection. However, there may be situations when you can’t use a card, such as paying for a taxi or tipping a tour guide. That’s why it’s strongly recommended you carry at least some cash at all times.

Another alternative that is becoming increasingly common is mobile payment apps. This includes digital wallets such as Apple Pay, Google Pay, as well as peer-to-peer payment apps such as Venmo, PayPal, and Cash App. Other countries might have different apps, such as WeChat Pay and Paytm. These apps are generally safe, secure, and convenient. However, they might not be accepted everywhere, and they may require an internet connection to use. That can cause a snag if you haven’t purchased a local SIM card or data plan.