Should I buy euros or use my credit card?

Euros in Your Pocket or Plastic in Your Hand? Deciding the Best Way to Pay Abroad

Traveling to Europe? One of the first practical questions you’ll face is how to handle your money. Should you exchange your dollars for euros before you go, or simply rely on your credit card? While the convenience of plastic is undeniable, exchanging currency beforehand often translates to better value for your money.

The allure of simply swiping your card is strong. No need to worry about carrying large amounts of cash or finding a reliable exchange bureau. However, relying solely on your credit card while abroad can be deceptively expensive, especially regarding exchange rates.

Here’s the rub: While many credit cards boast “no foreign transaction fees,” this doesn’t mean you’re getting the best exchange rate. Point-of-sale (POS) transactions, meaning purchases you make directly with your card at a shop or restaurant, often use a less favorable exchange rate than the one your credit card company uses when converting your euro charges to dollars on your statement.

Think of it this way: the vendor processing your card transaction also wants a piece of the currency exchange pie. This often results in a slightly inflated exchange rate applied to your purchase at the point of sale. While seemingly small, these incremental differences can add up over the course of your trip, leaving you with a larger bill than anticipated.

By obtaining euros before your trip, you lock in a more predictable and often more favorable exchange rate. You’ll likely find better rates at your local bank or credit union compared to airport kiosks or exchange bureaus in tourist-heavy areas. This pre-trip exchange gives you more control over your spending and greater transparency into the actual cost of your purchases.

Of course, it’s wise to strike a balance. Carrying a reasonable amount of euros for everyday expenses like meals, transportation, and souvenirs can maximize your savings. Keeping a credit card for larger purchases or emergencies offers a safety net and can be useful for situations where cash isn’t accepted.

So, while the convenience of plastic is tempting, remember the potential hidden costs. A little pre-trip planning and currency exchange can go a long way in stretching your travel budget further, allowing you to enjoy more of what Europe has to offer.