Have you seen cash exchange rates that are worse than travelers check rates?
I’m about to travel to New Zealand and am wondering whether to take travelers checks. I’d assume that cash had better change rates, but looking online I see that some of the banks have more favorable rates for check than for cash. Is that common? Why?
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Check with your bank to see if they charge an international fee for ATM use. Some banks charge this while others do not. If you are lucky enough to have a no-charge bank, this is often the cheapest way to get money while overseas.
In Europe (I know New Zealand isn’t there) traveler’s cheques seem to carry an additional 1% charge at banks. And buying traveler’s cheques cost 1% as well. That said carrying large amounts of cash with you is not very safe.
The advice used to be to use your credit card for every major purchase to get the best rate if you did not want to carry cash. I have not traveled recently enough to know if that is still true, but 5 years ago that’s what I did.
I had a 3% charge last June while in Mexico for CC use in a foreign country. Check your policy first, or call up for CC company and get rid of the fee before you travel.
Did all this, and planning on using my cards to withdraw $ from ATMs. BUT, when we get there we’re going to buy a used car to drive. This means lots of $$ at once, and since we don’t have NZ bank accounts we need to bring it with us. Conventional wisdom (from when we used to use travelers checks) was that they were worse rate than cash but safer since they can be replaced if stolen. But, I looked into money changers and found that they seem to charge a worse rate for $ than checks. I’m wondering if this is common and why.
For the car, have you investigated a Letter of Credit?
Credit cards have started charging a hefty fee for usage abroad so that is not the best way to go anymore. Bank of America has an agreement with one bank chain in each of the European countries that they will not charge for ATM use. When I went to France this year, I took out a BoA debit card for that reason. If there is such an agreement between an American bank and an NZ bank, that is your best way to go. Traveller’s checks can at times be difficult to cash. ATMs are best, especially if you can get one with no fees as I said.
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