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How do currency conversions work?

A:

Quick Answer

Customers traveling abroad can convert cash from one currency to another through a bank or a currency exchange bureau. They can also use their bank card or credit card to make a withdrawal from an ATM, which will convert the money automatically.

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Full Answer

Currency exchange rates change on a daily basis. Customers can stay up-to-date on current rates using foreign exchange websites like XE or by looking up the current rate on bank websites, according to Fodor's Travels.

Customers can order foreign currency in their home countries through bank websites or at a local bank branch. They can also exchange foreign currencies for U.S. dollars online or in person.

Withdrawing money using an ATM is one of the cheapest options for converting currency while traveling abroad, says Fodor's Travels. Although some banks have fees for cash withdrawal in foreign countries, these are often low. Customers should be aware of bank fees before they take off. Some banks have partner banks in other countries and offer lower withdrawal fees through these banks. This can help save money in transaction fees.

Currency exchange bureaus can be a convenient option for converting currency, but they usually offer poor rates. Many also charge fees on top of their rates, which makes the conversion very expensive. Most "no-fee" currency exchange services still offer lower exchange rates compared to banks.

Some businesses in other countries offer customers the opportunity to pay in U.S. dollars. These businesses use their own conversion rate, which is often very poor. Whenever possible, customers should pay in the local currency, as converting money this way can be expensive.

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