Gephardt Busts Inflation: Americans shy away from using credit cards abroad, missing out on best exchange rates
Jun 24, 2022, 7:34 AM | Updated: 2:19 pm
SALT LAKE CITY — As COVID-19 wanes, travel agencies are seeing a massive spike in bookings as folks look to spread their wings and travel abroad. If that’s you, it will mean getting your money into whatever money that country takes.
We’ve all seen that kiosk at airports where you can change your U.S. dollars into euros or pesos or whatever. But that’s not usually the place to get the most bang for your buck.
How you choose to exchange could have you paying more, warns Jill Gonzalez with WalletHub.
“The best way to get the best exchange rate possible when you are traveling abroad is actually just to use your credit card,” Gonzalez said.
Today on #KSLTODAY, we found the best way to save money when exchanging money for those traveling abroad. So here’s the question: why are Americans hesitant to use it? Let’s #BUSTINFLATION. pic.twitter.com/pwOTG0XYAi
— Matt Gephardt KSL-TV (@KSLGephardt) June 24, 2022
Gonzalez says that using your credit card will get you the most up-to-date, best rate rather than exchanging money or getting traveler’s checks. And foreign ATMs tend to have some of the worst exchange rates and come with ATM fees.
But even though using a credit card is the best financial move, many travelers avoid it, according to research shared with the KSL Investigators.
Wallet Hub found that card loss and theft are what people worry about the most when using their credit cards internationally, followed by currency exchange rates and credit card foreign transaction fees. Overspending, which is a major factor in consumers choosing to not use credit cards at home, was at the bottom of Wallet Hub’s list.
If you do choose to swipe when traveling abroad, the time will come when you’re asked if you want to pay in the local currency or U.S. dollars. Always go local, Gonzalez says.
“Don’t opt for the U.S. dollar version, because that’s the merchant essentially tacking on a fee that is around three to 7% of your total purchase that they then pocket,” she said.
One very important caveat to all of this: not all credit cards are equal and some charge international fees. Most don’t but it’s still worth checking if yours does before you swipe abroad.