University of Michigan
International Center

home | study, work, & travel | travel abroad | general travel information | travel finances and currency exchange

Travel Finances and Currency Exchange

Introduction

As a student, you can enjoy affordable travel if you are prepared to do some research, share accommodations, and be flexible. On this page we offer some budgeting estimates, tips on how to carry and access your money, how to find exchange rates, and what to do if you need help from back home.

How Much Money To Take

The following are sample budget guidelines for several regions, based on student peer advisor travel experience and research in reputable travel guides. Budgets obviously vary depending on a number of things (lifestyle, time of year, location, etc), but these samples might help you with the types of expenses you need to consider when planning a trip abroad.

How To Carry Money

Tip: The best way to avoid loss or theft is to keep your valuables in a money belt worn underneath your clothing.

Credit/Debit Cards: Credit or debit cards are one of the best ways to use funds while traveling abroad. They get the best exchange rate and machines are usually available 24 hours a day. Visa and Eurocard/Mastercard are widely accepted. In addition to your credit card, you'll also want to be able to access cash since credit cards are not as commonly used abroad as they are in the U.S. Rural or lower-budget businesses may not accept credit cards as a form of payment at all.

If using credit/debit cards, here are a few things you should take care of before traveling:

Notify your bank of where you will be traveling and the dates. Fraud detection systems will cancel your card if it is used in locations that are unusual for you. Check to see what types of service charges you will be subject to if you use your card internationally. For example, you could be charged currency-exchange fees, third-party ATM fees, or others, resulting in significant charges. Remember that most banks have per-session and/or daily limits to the amount of cash that you can withdraw from an ATM.

Note on Credit Cards: Using a credit card, you can get a cash advance at a bank, although you will be charged interest continually until you pay back the advance.

Cash: Cash is a universally accepted form of payment, however it is also the most susceptible to theft or loss. You can exchange money at airports or most train stations. Banks generally offer a better exchange rate, but they may also charge a fee. If you decide to get foreign currency ahead of time, we recommend getting no more than $40-$60, as it will be more expensive here than in-country.

Traveler's Checks: Traveler's checks are prepaid checks that can be exchanged for currency at foreign banks. They have an advantage over cash in that, if they are lost or stolen, the checks are worthless because they require the signature of the check-holder.

Traveler's checks can be purchased at any major bank in the US before going overseas. Use them as a last resort as they yield the least favorable exchange rate but are secure and can be returned at any bank for no penalty upon your return.

Personal Checks, Cashier's Checks, and Money Orders: These are not recommended. If you are an American Express (aka AmEx) card holder, you can cash your personal check at most AmEx offices abroad for no fee (ask AmEx for a list of these offices). Otherwise, personal checks are virtually impossible to cash abroad. Even if you could, it might take 2-3 months to clear and charges might apply.

Rates of Exchange

If you are traveling only in countries that use the euro, you will not need to worry about fluctuating exchange rates. However, there are exceptions–Britain still uses the Pound, and non-EU members, such as Switzerland, have kept their original currencies. Remember that it is less costly to exchange your U.S. dollars directly for foreign currency than to change money twice (e.g. dollars to Euros then Euros to another currency).

To find out an exchange rate visit Xenon or search any major search engine. Refer to our Travel Abroad Web Sites, Currency Converters and ATM Finders section for more resources.

How to Exchange Currency

The key to successful money exchange is advance planning. Try to anticipate how much money you will need for a particular country. It is costly to convert to a new currency because each time you convert, you pay a service charge. However, you will not have to convert Euros, as the same money is accepted in Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. For more information on Euros visit Europa.

Tip: If purchasing traveler's checks, Ann Arbor banks sell them in U.S. dollars or foreign currency for a 1.5% - 2% charge. AAA offers them for no fee to members and at 1% to non-members. Credit Unions charge 1% -1 .5% for members. All brands of check are equally reliable. American Express tends to be the most popular because of its numerous offices (cashing traveler's checks at a branch of the issuing agency avoids fees).

You can exchange money at banks, traveler's check companies, airports, railroad stations, large hotels, some tourist information centers, and travel agencies. Offices of traveler's check companies, banks and sometimes exchange counters at airports offer the best rates. Be sure to find out what the fee for the exchange is. Many banks charge a flat service fee for cashing any amount of traveler's checks; others charge a percentage of the amount you exchange. Remember to bring your passport with you as identification every time you exchange money. If you can avoid it, do not exchange money at airports or high-traffic tourist areas, as they often will give you a worse rate.

Tip: An Ann Arbor local business, Boersma Travel offers Euros, UK pounds, Mexican pesos, travelers' checks in euros or pounds, and other currencies can be ordered with next day delivery. They have two locations.

Last reviewed: 03/10