Money is an important aspect of travel. Even though we try to book most of our travel on miles and points, we still have to use money during our travels to buy food, pay for transportation, etc. Some areas of the world make it easy to use your credit card for pretty much everything. Just be sure you have a credit card without foreign transaction fees. Other parts of the world are more cash dependent.
Avoid Exchange Shops
Either way, when you’re traveling it’s always good to have some local currency on hand. Many people use currency exchange shops to exchange their currency for the local currency. The problem with these exchange shops is that they charge a fee to convert your money.
For example, if I had $10 USD and I wanted to exchange it for Euros a currency exchange shop would only give me $7.40. Even though the exchange rate would give me $8.20. In this example, I would basically be paying a 8% fee to convert my money. No thank you!
The Perfect Checking Account for Travel
What if I told you that you could withdraw from any ATM and receive your money in the local currency for free? Sounds too good to be true right? Well it’s not. All you need to do is sign up for a Fidelity Cash Management Account.
This is basically a checking account provided by Fidelity Investments. There are no monthly fees or minimum balance requirements. Last, but not least, the cash management account allows you to withdraw cash from any ATM. If the ATM charges some sort of withdrawal fee, Fidelity will simply reimburse the fee. You also won’t incur any foreign transaction fees to exchange your money for the local currency. Here is an example from our Fidelity account:
In this scenario, we had to withdraw 400 Mexican pesos for our cab ride back to the airport. The ATM charged a ~$5 convenience fee. As you can see, Fidelity posted a rebate for that ATM fee. Therefore, it cost $21.19 for 400 Mexican pesos. I went back and looked at the exchange rate for that day and it was within a few cents. Much better than the 8% that exchange shops will charge you.
Don’t Pay to Withdraw Your Own Money
When we arrive at an international destination, we are typically able to find an ATM at the airport or our hotel. We withdraw cash (in the local currency) and that’s it. No ATM fees. No foreign transaction fees. This checking account probably saves us over $25 in fees per international trip. The debit card has a permanent place in my wallet so I always have access to cash via any ATM. Do yourself a favor and sign up for a Fidelity Cash Management Account.