If you're traveling overseas this summer, you may be wondering about how exchange rates will affect your souvenir shopping. Ray Hennessey, Editor of SmartMoney.com, has some tips on finding the best rate.
At the moment, the exchange rate for the U.S. dollar is pretty bad. "It takes a lot more dollars to get [euros and pounds] these days," says Hennessey. Your best bet is to get your foriegn currency here in the U.S. before you leave. "Go to your local bank to do it," says Hennessey. You'll get the best exchange rate at your bank as apposed to exchanging money at the airport or a currency exchange station once you're abroad.
While traveler's checks used to be very common, they've now been replaced by check cards or credit cards. When using credit cards abroad, however, it's important to pay attention to the fees involved. "Some credit card companies charge you more for foreign transactions than others," says Hennessey. Do your homework before you leave and figure out which of your cards has the lowest foreign use rate.
Another popular trend is to use your ATM card overseas to get foreign currency. This is generally a good move because, according to Hennessey, "in a lot of cases, they have less fees than they would here." Foreign ATMs are a great way to get cash abroad because they update their exchange rate every day. "You may catch a break," says Hennessey. "You may find out that on that day, the dollar is stronger against that [particular currency]."
Don't want to spend your vacation in Europe or Asia? Consider spending it in the U.S. where you know a dollar is worth just that: a dollar. Bermuda is another destination to consider. "The Bermuda dollar is tied to the U.S. dollar," says Hennessey, "so you don't have to worry about that exchange rate."
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By Erin Petrun
Copyright 2007 CBS. All rights reserved.