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Published: May 02, 2024 7 min read
Dollar Scholar banner featuring money management while traveling abroad
Rangely García for Money

This is an excerpt from Dollar Scholar, the Money newsletter where news editor Julia Glum teaches you the modern money lessons you NEED to know. Don't miss the next issue! Sign up at money.com/subscribe and join our community of 160,000+ Scholars.


All that pasta must have messed with my brain.

When I traveled to Italy last summer, I froze every single time a cashier asked whether I wanted to pay in local currency or U.S. dollars. It was hard enough for me to wrap my head around prices being listed in euros, and this question sent me into a state of total confusion. (What’s the right answer? Which option is cheaper? Can I get another Aperol spritz, please?)

Now I’m preparing for another summer vacation in Europe, where I’m bound to face this dreaded choice yet again. In my anxiety, I’ve realized I don’t actually know any of the best practices for personal finance on trips abroad.

This time, I’m determined not to go in blind.

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What are some tips for managing my money while in a foreign country?

Here’s what I learned.

1. Bring multiple ways to pay

Gunnar Olson, a reporter at the frugal-travel-and-flight-deal site Thrifty Traveler, tells me it used to be common for merchants abroad to not take U.S. credit cards. But that isn’t the case anymore, especially with Visa or Mastercard, which are popular overseas. (American Express and Discover lag a bit, but they’re working on it: Amex brags that the number of international locations accepting its cards has tripled since 2017.)

“In Europe, Asia, everywhere I've been — everywhere’s taking American credit cards now,” Olson says, adding that Apple Pay is widely accepted, too.

Even so, it’s not a bad idea to have multiple payment methods at my disposal. Olson suggests having some local currency on hand as a failsafe in case I get into a tight spot or lose my credit card.

2. Take out cash upon arriving

Olson, who has been to all seven continents, says that he finds taking out cash before leaving for an international trip leads to a markup. Ditto for withdrawals from those in-airport conversion kiosks, which tend to charge hefty fees.

Instead, Olson recommends getting a debit card that waives or reimburses foreign transaction fees (Charles Schwab has one) and using it at an ATM upon arrival.

“I was just in Japan,” Olson says. “I walked up to the first ATM I saw and pulled out the cash I needed for the rest of the trip.”

How much cash to carry is up to me, though as a rough guide, AAA suggests $50 to $100 per person per day. It’s also important to remember that tourist destinations are often pickpocketing hot spots. Regardless of how much cash I get, I should avoid keeping it all on me and take precautions like wearing a money belt or anti-theft bag.

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3. Research the local tipping culture

Before leaving, Olson says he always looks up the tipping etiquette in the country he’s going to. While it’s standard for Americans to tip 20% on just about everything, that’s not true across the globe. (For instance, Olson learned it’s actually considered rude to tip in Japan.)

According to The Frugal Expat, tipping is not customary in places like Switzerland, Belgium, China and South Korea. Some restaurants abroad may add service charges to the check or have high minimum wages that make tipping unnecessary, but this varies by location, so it’s crucial to read up on what’s expected — and what’s insulting — before I go.

“A little research about tipping goes a long way,” Olson says.

4. Remember the exchange rate

Olson likes to pay for cell service when abroad so he can use his phone to convert prices from foreign currency to U.S. dollars: “I like having the peace of mind that I’m not getting fleeced by someone for simple goods and services,” he says.

But travel expert Rick Steves writes on his website that there’s no need to “constantly consult a currency converter” as long as I know “the rough exchange rates.” Right now, $1 is equal to about €0.94, meaning I can think of things in France as being about the same price as in the U.S. — but a little cheaper.

“It's a really good time to be American abroad right now as far as how far the dollar goes,” Olson says.

5. Always pay in local currency

I finally got a definitive answer on the dynamic currency conversion issue, or DCC. Olson says local currency is the way to go, because otherwise I’m getting charged for seeing my price in USD (and that’s on top of any foreign transaction fees my card may charge).

Steves takes it a step further, writing that if I’m ever handed a receipt with two totals, I should circle the amount in the local currency before signing it. It’s my right to decline DCC.

“I can only think of cynical reasons [merchants] do this,” Olson adds, so “always pay in the local currency wherever you are.”

The bottom line

To manage my money well abroad, I should take out cash when I get there, bring backup payment methods, research tipping, keep an eye on the exchange rate and always choose to pay in local currency. Au revoir!

More from Money:

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