What Your Bank Won't Tell You About Currency Conversion

By Melinda Page
November 5, 2010
101105_currencyconversion
Illustration by Mark Matcho
Traveling abroad isn't cheap to begin with, so it's doubly painful when converting currency starts to add up—if you're not careful, you could lose up to 22¢ for every dollar. Here's what you need to know to protect your purse.

When it comes to navigating exchange rates, it pays to know all your options. From buying money online to grabbing it on the go at the airport, we've assembled a handy guide to the seven most common methods for foreign exchange. Each has its pros and cons (some of which can feel like legal swindling), so we've evaluated the options for you with the euro as our base tender, using an Exchange Rate Rip-off Meter from 1 to 5. After all, we can think of far more fun ways for you to spend your money.

Exchange Rate Rip-off Meter

1 Go for it!
2 Watch closely for fees.
3 Depends on your situation.
4 Avoid if possible.
5 Run away! Far, far away!

Swipe a Credit Card
Exchange Rate Rip-off Meter 1
How it works You can use your credit card just as you would at home; card issuers typically tack on currency-conversion fees of 2 to 3 percent for international transactions, you'll get the best exchange rate and fees that are lower than those associated with exchanging cash. If you want to get the best rate, sign up for a Capital One card, which levies no fees for international transactions. *$100 buys 74.24.
Best for The majority of your big purchases, hotel bills, and restaurant tabs. Basically, it's convenient enough to use instead of cash wherever possible.
Exception! Don't use it to take money out of an ATM—ever. You'll be hit with hefty fees (up to $20 in transaction fees or 4 percent of the amount of the advance, along with any local ATM fees), plus you'll be charged interest starting on the day you withdraw the money.

Withdraw Cash With an ATM Card
Exchange Rate Rip-off Meter 1
How it works Depending on your bank, your American debit card can also be used in international ATMs to withdraw local currency. Most banks tack on fees that can add anywhere from 3 to 8 percent. But a few, like Citi and Bank of America, have international branches or partners that allow you to use your ATM card fee-free in most cases. Bank of America is particularly attractive, thanks to a large number of global ATM alliance member banks—more than 20,000 locations in all. Check with your specific bank about its policies, and here's a tip: If you do have to pay international transaction fees, minimize them by withdrawing larger amounts less often. $100 buys 70.81.
Best for All purchases, big or small.
Exception! If you use an ATM outside your bank's global membership, you run the risk of incurring outrageous fees.

Exchange Cash at Your Bank
Exchange Rate Rip-off Meter 2
How it works Most large banks sell foreign currency, and if you have a bank account, you can order cash over the phone or online; with a few days' notice, it can be delivered to your local branch for pickup. Watch out for delivery fees on this option—they can be as much as $10, cutting into your take-home amount. Note: Some banks will waive this fee for their best customers (Citibank, for example, does so for its CitiGold members), so be sure to ask before ordering. One thing to keep in mind is that exchange rates for banks tend to be slightly better than exchange rates elsewhere, as banks receive wholesale rates that aren't available to the general public. $100 buys 71.81.
Best for Those who want cash on hand before a trip.
Exception! If you have a premium bank account with a high balance, you'll get a better exchange rate, making this deal more attractive.

Buy Cash Online
Exchange Rate Rip-off Meter 3
How it works You can order currency in advance of your trip from websites like oanda.com, and they'll ship it to your home using a secure two-day delivery service. $100 buys 64.
Best for Having cash on hand for immediate purchases like cab fare or a bottle of water when you land; be warned that the high delivery fees eat into the bang you get for your U.S. bucks.
Exception! If you are looking to get large amounts of cash (say $1,000 or more), delivery fees can sometimes be waived if you ask.

Buy Traveler's Checks
Exchange Rate Rip-off Meter 4
ange Rate Ripoff Meter 4
Exchange Rate Ripoff Meter
How it works Travelers' checks function just like U.S. dollars, except they can be replaced if they're lost or stolen. Once you get to your destination, you still have to find a place that will exchange the checks for local currency, and you'll pay any associated fees, which can add up to $9 per check. Bottom line: Not convenient. $100 buys 63.11.
Best for Those who don't want to use credit or ATM cards or carry large amounts of cash. Also, if you're worried about theft and loss, this option comes with peace of mind—if, for example, your American Express traveler's checks are stolen, the funds can be replaced anywhere in the world and usually within 24 hours.
Exception! If you're going to China, traveler's checks are an excellent value. Fees are low, and the exchange rate is regulated by the Chinese government, making this one of the safest and most inexpensive ways to exchange U.S. dollars for yuan (especially in more rural locations, which are less likely to have ATMs).

Buy a Prepaid Foreign Currency Card
Exchange Rate Rip-off Meter 4
How it works Launched by foreign-exchange company Travelex in 2007, these cards can be used just like credit or ATM cards, but travelers preload them with a set amount of euros or British pounds (the only two currencies available for now). This seemingly nifty convenience comes at a cost—numerous fees (for withdrawals, inactivity, and to close the card) and restrictions (withdrawal minimums and limits per day). One plus: If the card is lost or stolen, Travelex will replace it; however, the company won't refund the money lost, and it will charge a fee for the replacement card. *$100 buys 68.34.
Best for Purchases big or small (it works as a debit or credit card would).
Exception! Though not very flexible, this option would work nicely for those on a set budget or for those who are sending kids off on a European vacation but don't want to hand over a wad of cash.

Foreign Exchange Desk (Airports, City Centers, Hotels)
Exchange Rate Rip-off Meter 5
How it works Most international airports have at least one foreign-exchange desk where you can swap U.S. dollars for the local currency. You hand over your dollars; the clerk deducts fees—sometimes up to 20 percent! You can also exchange American cash for local currency at your hotel; commissions and rates there will vary widely. Some currency-exchange desks located in city centers offer better rates than the ones at airports, but proceed with caution: Even those that advertise 0 percent commissions probably have hidden fees. $100 Buys 59.65.
Best for At this rate? Save it for emergencies.
Exception! None—with all the other options available for exchanging currency, we say avoid this scenario.

*All calculations were done on the same day and are based on the interbank euro to dollar rate of 1.2994. Exact figures will vary depending on the situation.

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Top 10 Ski Deals This Season

Stratton Mountain, Vermont Prepaid discount cards can often be a racket, but not so at Stratton, a 600-acre southern Vermont standby that hosts the top terrain park in the East. Stratton's $79 X2 card, which you can buy online, pays for itself in a single visit: Card carriers get a one-day lift ticket free with the purchase. What's more, they'll save $10 to $30 off any additional day passes and get to skip the ticket window lines—a big perk considering that the wait can be nearly a half hour on busy weekends. stratton.com, adult passes from $65 (online). Winter Park, Colorado The closest major resort to Denver (only 67 miles away), this bump-skiing paradise has added upgrades worth $170 million, including an ice-skating pond. What hasn't changed? The wallet-friendly lift-ticket prices, such as an $82 two-day child's pass over spring break. The nearby town of Fraser has the best affordable restaurants and hotels, such as the Rocky Mountain Inn & Hostel, which runs free shuttles to the slopes (therockymountaininn.com, from $79). winterparkresort.com, adult passes from $65.* Saddleback, Maine Once down on its luck, this resort in Maine's Rangeley Lakes region, two and a half hours west of Portland, is back in a big way. Saddleback has increased its terrain 60 percent in seven years and recently added a new lift, three new trails, more snowmaking, and a beginner's area—all without raising lift-ticket rates above $40. New England–area students who make the honor roll are eligible for $99 season passes, and all kids will love Saddleback's quirky free events, such as the annual Cardboard Box Race (March 26). saddlebackmaine.com, adult passes from $35. Bridger Bowl, Montana Bridger is one of the biggest mom-and-pop mountains in the U.S., and this year it replaced its two main lifts with one triple chair, increasing the number of skiers served by 7.5 percent and reducing undue stoppages. Single storms here can bring more than 70 inches, and the terrain goes from beginner to expert (the famed Bridger Ridge features steep, 500-vertical-foot chutes where avalanche beacons are necessary). The world-class ski school for kids plus numerous blue and green runs keep the place from getting too hard-core. bridgerbowl.com, adult passes from $47. Whistler Blackcomb, B.C. With 8,171 acres of skiing, $91 lift tickets, and a bevy of luxury hotels, Whistler Blackcomb is one of the biggest, priciest megaresorts in North America. But it's also a destination everybody needs to see at least once, and for budget travelers, the time is right now. The post-Olympic hangover has left a multitude of new restaurants, hotels, and activities (think bobsled and skeleton tracks) coping with a lower demand. To wit: Hostelling International opened a lodge, HI Whistler, in the former Olympic athletes' village, with 14 private rooms and rates starting at $156 in peak season (hihostels.ca). Also, if you buy your lift ticket online at least three days in advance, you can save up to 20 percent. whistlerblackcomb.com, adults from $91. Ski Santa Fe, New Mexico Just 16 miles up the road from New Mexico's capital, Ski Santa Fe may be the most blissfully undervalued mountain in the Southwest. What sounds like a local hill is actually a 12,075-foot peak in the Sangre de Cristos, making it one of the highest resorts in the nation. The snow is similar to the bone-dry powder in Taos, but lift tickets are 15 percent cheaper, and the runs are just as striking—the longest is three miles. With Santa Fe so close, visitors will want to fuel up on a breakfast burrito with spicy chorizo from Tia Sophia's on West San Francisco Street before driving the 10 minutes to the slopes (505/983-9880, burritos from $6.50). skisantafe.com, adult passes from $60. Grand Targhee, Wyoming Skiers at Jackson Hole might share the slopes with locals like Sandra Bullock and Harrison Ford, but they'll pay for the privilege. For the same ridiculous snow (500 inches per year) and sweeping Teton views, savvy locals opt for nearby Grand Targhee, where the lift tickets are 25 percent cheaper. It's also far less crowded, averaging just one skier for every two acres. Targhee is 45 miles from the town of Jackson, and the drive is easy enough that you can do it as a day trip. The hotel selection in Jackson is better anyway: Try the family-owned Antler Inn, a block away from the popular Town Square area's bars and restaurants (townsquareinns.com/antler-inn, from $55). grandtarghee.com, adult passes from $69. Kirkwood Mountain, California Bay Area skiers know that while the party may be in South Lake Tahoe, the powder is an hour south at down-home Kirkwood. This massive mountain gets buckets of snow (up to 600 inches a year) and has steep chutes sure to please intermediates and experts. Best of all, lift tickets cost 10 percent less than those at resorts farther north. Intermediate snowboarders should take advantage of Kirkwood's backcountry courses, the only West Coast powder-instruction program accredited by Burton. kirkwood.com, adult passes from $74.* Revelstoke Mountain Resort, B.C. North America's newest ski resort is one of its most promising: It's 5,620 feet tall, set in the Banff-like Columbia River valley, and gets up to an astounding 60 feet of snow every year. But Revelstoke is still somewhat of a work in progress, so lodging in the base area is being offered at discounted rates. (The lesson: Go now, while it's still affordable!) You can book a room in the resort's ecofriendly Nelsen Lodge for as little as $131 per person per night, including a lift ticket, free Wi-Fi, and complimentary fruit and coffee (250/814-5000). Head down the Last Spike for one of the biggest sustained vertical drops on the continent, at 9.5 miles long: Two laps top-to-bottom here, and your quads will beg you to cancel yoga classes for a month. revelstokemountainresort.com, adult passes from $74. Mt. Bachelor, Oregon At many resorts, cheaper lift tickets during the shoulder months often means poorer skiing. Not so at Mount Bachelor, a long-dormant volcanic cone in the Cascade Range, where the off-season is prime. In early December and May, lift tickets are discounted, but the slopes are still excellent: Christmastime is often celebrated with base depths of four feet of snow, while May temperatures reach into the 60s for ideal spring skiing conditions. To boot, last year the resort instituted a new pricing structure based on how many lifts it anticipated opening each day. No snow? Tickets could be $50. Total whiteout? You'll be happy to pay the full $70, which, for 3,365 vertical feet spread over 3,683 acres, is still a bargain. Early- and late-season deals at the Riverhouse (riverhouse.com, doubles from $125) in nearby Bend offer free breakfasts, a free night with a two-day purchase, and a free mountain shuttle. mtbachelor.com, adult passes from $50. *Last season's prices. This year's rates were unavailable at press time.

Mega-Cruise Smackdown

Ship StatsOasis: 225,282 tons; total capacity of 6,296 cruisers, akin to the population of Hailey, Idaho. Epic: 155,873 tons; total capacity of 5,183 cruisers, akin to the population of Moab, Ut. >SCORE: 1 for Oasis! Sometimes size really does matter—at least when it comes to providing space for fun activities, meals, and more. At over 225,000 tons, Oasis dwarfs the Epic, which is sizeable in its own right. Most Notable FirstOasis: Central Park is not only the first open-air park but also the largest green space on any ship, at 62 feet by 350 feet. It has more than 12,000 trees and plants (including fern pine and golden bamboo), as well as gardens of calla lilies and rabbit's foot ferns. Epic: Svedka, the first-ever ice bar at sea. Parkas are loaned out at the door to patrons (maximum capacity: 25), and there's usually a line to get in. The $20 cover charge includes two Svedka-based cocktails. After that, each one costs $8.75. >SCORE: 1 for Oasis! While an ice bar at sea is certainly cool and all, the actual experience—more like being in a walk-in freezer than in a club—is somewhat of a letdown. Meanwhile, the airy park actually delivers and is free for all. Most Awesome EntertainmentOasis: Ice shows at the ship's Studio B ice rink (free); diving and synchronized swimming spectaculars at the AquaTheater (free); and Disco Inferno Street Party theme nights during which partygoers boogie to the Bee Gees. Epic: Shows by members of the Chicago-based Second City comedy troupe, where Tina Fey and Dan Aykroyd got their starts; the Cirque Dreams and Dinner acrobatic dinner theater ($20–$30); free Blue Man Group shows; and a Legends in Concert show with impersonators including Elvis, Michael Jackson, Shania Twain, and Cher. As many as 10 shows are offered daily. >SCORE: 1 for Epic! You can count on Epic for both quality and quantity. Norwegian really went the extra mile to bring in first-rate acts and to guarantee that there are enough shows daily to grant everyone access. Most Exciting Kid-Friendly FunOasis: Baking-soda volcanoes and Crayola-sponsored coloring for the under-12 set; a Boardwalk with a full-size wooden carousel; Nintendo Wii consoles; and DJ lessons for teens. Epic: A twice-weekly Nickelodeon Slime Time Live event—during which kids compete for the chance to end up green and goopy—plus dance parties with Dora the Explorer. >SCORE: 1 for Epic! There's simply no contest here. As every kid knows, being slimed comes with bragging rights. Most Adrenaline-Pumping ThrillsOasis: Two FlowRider simulated surfing platforms, where you can borrow either surf boards or boogie boards, plus the first-ever zip line at sea. Epic: A 2,112-square-foot climbing wall with a waterslide that cuts right through it to a swimming pool below, along with bungee jumping and the Spider Web, a 24-foot-tall enclosed climbing cage. >SCORE: 1 for Oasis! This was a tough one. Epic clearly outdid itself with that unimaginably massive waterslide, but based on novelty alone, we just can't ignore the cool-factor of surfing or careening down a zip line 80 feet above the ocean. Most Comfortable CabinsOasis: Among the 37 cabin options, the average stateroom size is 182 square feet. Guests are given the option of looking out over the ocean, the park, or nowhere at all. Epic: The average room size is 216 square feet, and guests rave about the ample storage space and the fact that toilets are separate from showers. Unlike on all other cruise ships, solo cruisers can get their own room without paying a surcharge. The 128 Studio staterooms are smaller—at 100 square feet—but are equipped with the same amenities, full-size beds, and give guests access to a special solo cruisers' lounge. >SCORE: 1 for Epic! We are totally on board with the fact that Epic treats solo and budget cruisers best. So much so that we gave Norwegian Cruise Line an Extra Mile Award this year for offering the solo cabins. Most Satisfying Dining ChoicesOasis: Of the 24 restaurants—including a sushi bar and a Spanish-themed wine bar—cruisers eat for free at 12. The 150 Central Park restaurant is the priciest: $35 covers all food and some non-alcoholic drinks like coffee and tea; wine pairings cost extra and complement the six- to eight-course tasting menu that changes twice each voyage and seasonally each year. Epic: Of the 20 restaurants—including a 24-hour sports pub and Shanghai's, a Chinese restaurant that has a noodle bar—cruisers eat for free at 11. Brazilian steak-house Moderno Churrascaria is the most popular option, where diners pay $18 for the salad bar and unlimited selections of meat. >SCORE: 1 for Oasis! We did the math. On a seven-day cruise, you could eat every single meal in a different restaurant on the Oasis—no repeats. What's more, that extra free restaurant option really counts in our book. Smackdown Verdict! Oasis Wins 4 to 3Royal Caribbean is clearly doing something right. Not only is its Oasis the ruler of the seas when it comes to megaships, we know Budget Travel readers prefer it above all other lines. In our 2010 Readers' Choice poll, it was ranked No. 1. Get the scoop by reading profiles of real-life RCI-loving cruisers (on a different ship). BOOK ITOasisMost affordable itinerary: A five-night Western Caribbean cruise in an interior room for $749 per person. The ship departs December 18, 2010, and docks in Cozumel, Mexico, and Nassau, Bahamas. EpicMost affordable itinerary: A four-night Western Mediterranean cruise in an interior room from $509 per person. The ship departs May 18, 2011, and docks in Barcelona, Marseille, and Mallorca.

Just Back From... Tracing Roots in Poland

Great local meal... Traditional Polish fare at the Polskie Smaki (Polish Tastes) restaurant, a block from Kraków's central square. We drank tea and ate zurek and barszcz (soups), golabki (stuffed cabbage), and pierogies (Polish pot stickers) with a variety of fillings, including my favorites: sauerkraut and potatoes with cheese. Our total bill was less than $15. My favorite part... Finding the time-capsule village of log cabins where my grandparents once lived. It's called Polany and is about 100 miles southeast of Kraków, near Magura National Park and the border with Slovakia. We visited a local heritage site, the Sądecki Enthographic Park, where we learned about the daily life of the Lemko-Rusyn people more than 100 years ago. On our three-day drive through the surrounding countryside, we saw small farms, storks' nests, and beautiful wooden churches called cerkiews, some of which are 500 years old. [PHOTO] Worth every penny... Prices in Poland are so reasonable, just about everything is a bargain. But the hand-embroidered table coverings from the Kushubian Art Gallery in Gdańsk are our most treasured souvenirs. The owner's daughter, who was embroidering when we entered the shop, let us take her photo while she was holding her beautiful handiwork. [PHOTO] I also recommend the free walking tours of Kraków and its Kazimierz district, including a stop outside the newly opened Schindler's Factory museum. The college-student guides are licensed and conduct the tours just for tips. [PHOTO] Fun surprise... Seeing newlyweds having their wedding photos taken outdoors, [PHOTO] particularly in the rain at Malbork Castle. [PHOTO] We were also surprised at how very helpful and courteous people were whenever we asked for help. People took the time to try to understand our questions and point us in the right direction—even this elderly woman who was picking mushrooms in the countryside. [PHOTO] Moment when things got tense... When driving through the countryside, I decided to take a "shortcut." After we had to ford three streams to reach our destination, I realized I should have stuck to the roads shown on our map. It also reminded me that parts of Poland had suffered from severe floods the previous spring, which washed away many bridges. Lost in translation... The symbols of restrooms! Some still show only circles and triangles—like the outhouses near one of the old wooden churches we visited. [PHOTO] We later learned from our walking-tour guide in Kraków that women use restrooms marked with a circle and men use ones marked with a triangle. Total rip-off... The Wi-Fi fee at our Marriott hotel in Warsaw was steep for budget travelers like us. We avoided the fee by using the free Wi-Fi at the mall (Złote Tarasy) across the street, under a big glass bubble dome; we found that many businesses offer free Wi-Fi throughout Poland. I'm still laughing about... Running through the underground maze of tunnels at the Warsaw station during rush hour to catch a train. With suitcases in tow, we struggled to keep track of the man who was kind enough to lead us to the correct platform. Otherwise, we might have been lost forever in the labyrinth of confusing passageways. Hotel I liked... The Venetian House apartment/hotel [PHOTO] on the huge town square in Kraków (Rynek Główny 11) is brand-new, and the rooms include a small kitchen. It also had an elevator, so we didn't have to drag our luggage up the stairs! The location is superb for tourists—by the old Cloth Hall [PHOTO] and the new high-tech underground museum that details Kraków's history. We were just a few steps from the Polonia House, where we heard a passionate Polish pianist play Chopin études and mazurkas during an evening concert. Wish I'd known that... All the trains we rode actually accepted our seven-day rail pass. I could have saved a $7 fare. Unfortunately, some employees at small train stations are not familiar with the passes and may say that you need to buy a ticket. You may be better off just hopping on board with your pass, as the conductors are more knowledgeable about them.

The Ultimate Packing Guide

When we launched the World's Best Packer contest in May, we expected a healthy response. But the entries were even more creative than we'd anticipated. From slide shows to videos to a Frost-inspired ode titled "The Suitcase Not Taken," each was full of smart advice for better-loaded bags. We assembled our favorite suggestions to create this handy manual. —JD Rinne TOP LAYER All-weather items like a poncho and a hat go on top, in case you need them right away. In a pinch, the poncho can also help protect your suitcase from rain. —Andrew Doukas, Portland, Maine Bring a deck of cards for entertainment on the road. Winner Larry Swingen opts for Mini Uno. Toss in a collapsible, lightweight bag to fill with souvenirs or laundry. —Velma Greene, Harpers Ferry, W.Va. MIDDLE LAYER Use your shoes as packing cubes: Stuff them with small items like socks or even a travel alarm clock. —Ilana Berner, Caesarea, Israel Save space by choosing a good-looking jewelry pouch that can pass for a purse. —Phebe Schwartz, St. Thomas, U.S.V.I BOTTOM LAYER Position heavy items near the wheels of your suitcase to keep the bag from toppling over when it's upright. —Ivana Rix, Vienna, Va. Rolled clothes are less likely to wrinkle, and they create a flat surface for layering everything else. —Inga Carmack, Port Orchard, Wash. Double-duty items are key. Bring pants that zip off into shorts, a sarong (for use as a beach towel, scarf, skirt, or cover-up), or a little black dress that can be toned up or down. —Amy Zimmer, Murrells Inlet, S.C. MEET OUR WINNER! Larry Swingen of Malta, Mont., took first place in our contest for the World's Best Packer with more than 17,000 votes. He and his wife, Barb, walked away with a six-night trip to Egypt, courtesy of Foreign Independent Tours, and a six-piece set of American Tourister luggage. Congratulations, Larry! MORE FROM BUDGET TRAVEL: Watch out for these 7 flight attendant pet peeves. Google has created a car that drives itself! Sounds cool, but will it be the end of the road trip as we know it? Check out the world's newest natural wonders.