When traveling abroad, you want to ensure that you have the money you need to fund your trip. You'll likely need to have local currency on hand to purchase taxis, provide tips, buy souvenirs and fund other expenditures. A foreign currency order is one way to receive foreign currency from your bank or through AAA.
A foreign currency order through AAA helps you save valuable time that you could use for sightseeing or visiting tourist destinations by providing all the foreign currency you need before leaving for your trip. With AAA foreign currency orders, you can choose from over 70 different types of currency.
This article provides foreign currency tips to help you get the best exchange rate while making your money last as long as possible while you're abroad. We offer advice to help prevent you from overspending on your vacation and explain how ordering foreign currency as a AAA member can provide you with peace of mind that you're getting the best exchange rate.
Get Your Money Ahead of Time
When traveling abroad, it's a good idea to order your foreign currency in advance to minimize currency exchange fees. If you wait until you're in another country, the currency exchange rates may fluctuate so you don't receive as much foreign currency per American dollar. If you get your foreign currency in advance, you can take advantage of market trends and get the best deal.
Getting your money in the U.S before you travel reassures you that you're receiving authentic foreign currency at the best rate available. Advanced foreign currency orders could also qualify you for certain rewards depending on where you bank. Some banks provide discounts on foreign currency exchanges, while others have perks such as free shipping.
If you cannot get your foreign currency order ahead of time, you can still make an exchange once you arrive. However, you'll want to avoid these two situations:
- Exchange kiosks at airports: Once you arrive, it can be tempting to exchange your currency at convenient airport kiosks. However, these kiosks often have higher exchange rates due to their convenience. Your money won't be worth as much at these kiosks, meaning you'll have less foreign currency to spend on your trip.
- Paying in your own currency: You may be tempted to save as much foreign currency cash as possible and pay with your card whenever you can. However, some banks charge foreign transaction fees, which can quickly add up if you make multiple purchases. Rather than managing the extra charges, it's better to exchange your money ahead of time.
The best way to get the most out of your foreign currency exchange is to place your order before leaving the U.S. AAA allows members to conveniently order travel money without worrying about high fees or exchange rates.
The convenience of ordering foreign currency with AAA includes the ability to order more than one type of currency simultaneously. You can even order various denominations. You won't have to pay a fee for orders over $200. Any orders under that amount only cost $10. You can pick up your order in as little as two business days at the appropriate branch, allowing you to get on with your trip.
AAA TipPaks®
AAA members can take advantage of TipPaks®, prepackaged amounts of foreign currency for those looking for a smaller amount for their travels. AAA offers TipPaks® at all of our Central Penn branches for your convenience. Our TipPaks® are available in the following foreign amounts:
- 100 Euros
- 100 British pounds
- 125 Canadian dollars
The price of TipPaks® varies based on the current exchange rates, which change each day. AAA accepts payment for TipPaks® in cash, credit or debit.
TipPaks® are a convenient way to get a small amount of foreign currency for your trip to pay for small transactions, such as taxi fees or tips. TipPaks® are also useful if you travel between multiple countries frequently, allowing you to have the currency you need on hand.
Rather than making multiple orders for different countries, you can use TipPaks® to receive all the foreign currency you need at once. If you're planning a trip to backpack across Europe but don't want to carry too much cash, TipPaks® can help you quickly get the funds you need to get on your way.
Understanding Foreign Exchange Rates
Every day at every hour, currency changes hands in the foreign exchange market. Currency traders worldwide are linked to banks through an electronic trading platform. At the end of each day, currency traders in Asia pass open currency information to traders in Europe, which is then passed to the Americas and back to Asia to restart the cycle.
Exchange rates are the value that one currency has against another. For example, exchange rates determine how much $1.00 is worth in other countries, such as England, China or India. Since the U.S dollar is the most commonly referenced currency among traders, other countries' currencies are most often quoted compared to U.S currency.
To determine the exchange rate between one country's currency and another, traders usually use the power parity theory. You can depict this theory using the "Big Mac index," an example using McDonald's Big Mac. If the world were perfect, the Big Mac would be of the same value in every location. So if the exchange rate between the U.S dollar and the British pound is two and a Big Mac costs $2.00 in the U.S, it would cost $4.00 in Britain.
Sometimes, the purchasing power of specific currency changes. For example, the purchasing power of the British pound may increase so that it's worth more than the U.S dollar. The exchange rate would then adjust so the pound could purchase more dollars than before. Without the fluctuation in the exchange rate, consumers would simply flock to countries where goods are cheaper.
If you're traveling abroad, you'll want to be familiar with the conversion between the U.S dollar and other countries' currencies. With this awareness, you can exchange your cash when it's worth the most in other countries. Ordering foreign currency when exchange rates are high means you may not be able to stretch your money as far as it can go.
Ordering your foreign currency through AAA before leaving the U.S. helps you avoid worrying about high exchange rates. You can get more for your U.S dollar, allowing you to make the most of your travels.
Tips for Managing Your Money Overseas
When traveling abroad, you want to manage your money correctly to prevent paying significant fees and financial strain. Follow these tips for money management when your travel abroad:
- Contact credit card companies and notify your bank: If you're traveling to a different country, let your bank and credit card company know. Some banks will freeze your account if they suspect suspicious activity when you make purchases internationally. You'll also want to keep your contact information up-to-date to ensure that your bank can reach you if necessary. Notifying your bank allows you to access your money as needed. Your credit card company may even offer cards with travel mile rewards.
- Get international numbers for lost or stolen cards: Be sure you have an international toll-free phone number on hand so you can report a lost card to your bank or credit card company. A representative can help you contact the appropriate parties and freeze your account or cancel your card. They may even be able to help you find a replacement card while you're abroad.
- Store sensitive ID items and money securely: Your IDs, such as your passport and driver's license, are essential to help you travel between countries. Your airline ticket and foreign currency are also sensitive items that you should store securely. Find a secure location to store your sensitive items. Some hotels will have a small safe where you can keep your documents and money while you're out. You can also look into theft-proof bags to carry on your person.
- Carry only the cash you need: Avoid carrying more money than you need for each day's expenses. If you take more than necessary, you may drop it or have it stolen, which could be a significant loss that might cut your trip short. You may also end up overspending with too much cash handy. Each morning, determine how much cash you'll need for items such as food, shelter and transportation costs. You can also budget for spending money, but limiting yourself allows you to have more throughout your trip.
- Don't use ATMs: If you use an ATM internationally, your bank could charge you fees which cut into your spending money. You may be charged for using an out-of-network ATM, foreign transactions or any additional fees. Securing your foreign currency before you travel is the best way to avoid ATM fees adding up and making it challenging to manage your money.
- Spend all your cash before the end of the trip: If you wait until you get home to exchange your currency back to U.S. dollars, you might not get the best exchange rate when you sell your foreign currency. Additionally, most places won't exchange coins. Try spending your cash before you get home. If you don't want to spend all of your money on yourself, you can often find charities at airports to donate your remaining foreign currency.
Managing your money is essential to ensure you protect your funds and have enough to get around while abroad. Keep an eye on exchange rates to determine when the best time to exchange your currency is before you travel.
Saving Money During Overseas Travel
While managing your money is an essential part of travel, you'll likely want to save as much money as possible while abroad. Saving money on certain things will allow you to spend more on attractions and experiences to make the most of your trip, making your budget go as far as possible. Here are some tips to help you save money during your travels:
- Be flexible on dates and locations: When traveling, remaining flexible can help you save money. If you're set on one destination, be open to various dates. Scheduling your trip earlier or later can help you avoid large crowds and higher costs. If you have a specific time frame for travel, be flexible on your destination. For example, if you want to travel to a tropical location, consider going during the rainy season when costs tend to be more affordable. You can find destinations like these any time of the year.
- Visit during the off-season: If you can travel at any time, be open to visiting your chosen destination during the off-season. Off-seasons tend to be during the cold or rainy season when fewer people seek to travel or take a vacation. Demand for these destinations will be lower, meaning that costs for airfare and lodging will be more affordable. You'll be able to save money on travel costs, allowing you to spend more on exciting adventures and expenditures.
- Get off the beaten path: Tourist destinations tend to cost more since they're in high demand. You'll also have to deal with large crowds and long lines. Getting off the beaten path and traveling to lesser-known locations can be a fulfilling experience, immersing you in the local culture and natural beauty. You can also save money on expenditures, allowing you to splurge more on souvenirs to commemorate your trip or once-in-a-lifetime experiences.
- Find travel deals: Look for travel deals to reduce the cost of airfare and hotel rooms. AAA has travel deals for members to help reduce the cost of travel and help you save money. AAA's travel agents will help you achieve the trip of your dreams and find you the best deals.
- Pack efficiently: You can avoid paying oversized or checked bag fees each time you fly when you pack efficiently. Determine what's necessary when you travel and what you can live without. For example, don't pack anything you only need at home, such as winter clothes on a tropical vacation. Use as much space in your main bag as possible to prevent needing a secondary bag, such as packing your laptop and electronics in your carry-on rather than their own case.
Order Your Foreign Currency Today
When traveling internationally, you want to ensure you have enough foreign currency to travel comfortably while saving money on high exchange rates. AAA offers foreign currency orders from over 90 countries, allowing you to order multiple countries' currencies simultaneously. You won't have to worry about high transaction fees or exchange rates. You can also take advantage of our TipPaks® to receive a prepackaged amount of foreign currency.
AAA also has multiple travel services available to help you find the best deals. You can work with one of our travel agents or book your trip through our website. Contact a travel agent to learn more about how we can help you with your trip or become a member today.
