Over the past four years, we’ve visited nearly 30 countries. Having easy access to our funds to pay for our adventure was important so it didn’t distract us from fully enjoying our experience. With many credit cards offering no-fee foreign transactions it became the go-to option anytime we needed to complete a purchase.
Everywhere we went there was typically decent credit card acceptance. This would also direct us to more mid-to upscale restaurants. But we quickly learned that some of our best experiences, especially in Latin America and Asia, were found in small family-owned restaurants and local markets that required cash. Unfortunately, acquiring local cash presented some unexpected obstacles.
Exchange rate anxiety
At the start of our adventure, I remember having anxiety every time we arrived in a new country. At a minimum, traveling from the airport would require cash for the taxi.
Every airport has an international money exchange with the worst exchange rates and fees. More and more airports are adding ATMs from the largest banks in their country.
I would reluctantly use them when there was no choice. There was always a knot in my stomach from the sensation of our money spilling into their pockets. This only cemented my resolve to figure out how to beat the system.
It turns out there is a Global ATM Alliance that eliminates the bank fee (typically US$5) for using an overseas bank ATM. There is still the 3% foreign exchange fee which turns out to be minor compared to what it was costing before. Luckily our bank in the USA is a member (Bank of America) so it’s now a great option as long as we are in a country with a member bank.
Look for member banks
For Latin America, Scotiabank is a member. They are in Canada, Mexico, Peru, Chile, and most Caribbean islands. As a result, one of my first tasks was to locate the Scotiabank ATM and to later map the locations closest to where we are staying.
Something to be aware of when using their ATM is that the last step asks if you will accept their exchange rate. It turns out that this rate is awful. I found that by declining it I would get a much better rate (about 5% better).
Even though Scotiabank acquired half of Colombia’s Banco Colpatria it’s unfortunately not included (believe me I tried!). In Ecuador, I like to use Banco Pichincha since they charge no upfront local fees. We also found that once we befriended a few local expats they were more than happy to share which ATM is best.
I’ve been known to walk great distances to minimize the costs of acquiring local cash. Share with me what you’ve done so we can all benefit!
by: Michael Wagner