If you’re heading out of the country for spring break, pay attention to your wallet. Conversion rates with the euros may be in your favor, but watch out for foreign transaction fees. This week Peter offers advice on exchanging money and earning frequent-flier miles with a credit card.
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Dennis in Miami, Florida asked: We are traveling to Switzerland in August. Should we buy currency in our local bank, at the airport, or wait till we get to Zurich?
Peter replied: None of the above, Dennis. Get yourself an ATM card from a bank that doesn’t charge you a foreign transaction fee. There are a number of credit card operators and banks that will do that for you including other financial institutions like Charles Schwabb, where they don’t charge you a fee or they rebate your fee. Just use your ATM card at local banks wherever you happen to be to get whatever you need just for that day.
You are not getting hit with commissions from money changers and you are not getting hit with commissions when you change the money back. You’re just taking out exactly what you need and it makes the most sense. Don’t buy any kind of foreign currency in the United States, because you’ll pay a hefty premium and commission. Plus, you won’t get a good exchange rate. Don’t change money overseas at one of the money changers at the airport, just make sure you are using a bank or ATM card from a financial institution in this country that doesn’t charge you a foreign transaction fee or basically or an ATM usage fee.
For more information, check out this Video Travel Tip on currency exchange.
Selma in Seattle Washington: I heard you talking about Capital One’s benefits, but American Express offers almost the same benefits. Why choose Capital One over American Express?
Peter replied: It gets down to the interest rate. Find out the interest rate is for Capital One. Find the interest rate for American Express. Find out if it is revolving credit or if it’s a statement is due at one set time. If all points are the same, then you can make your choice between the two, but I don’t think they are.
American Express, Capital One and one or two other credit cards have gone from the affiliated card, where you only earn miles on one program, to a card where you don’t earn miles on an airline program, you earn points that translate into dollars that actually buy the airline ticket.
For more information, check out Airline Transparency Changes and New Ways to Redeem Frequent-Flier Miles.
By Peter Greenberg for Peter Greenberg Worldwide Radio