Currency Conversion

We will be traveling to Budapest, Hungary, and Prague, Czech Republic. Do you have any easy tricks or tips for conversion of local currency into U.S. dollars?

—Mari, The Villages, Fla.

Here's a list of the good, the bad, and the ugly, in overseas currency-conversion fees.

1. Currency Kiosks. If you want cash immediately, currency kiosks are the way to go, since you can easily spot them at airports and in train stations. And, if you're not aware of your ATM or credit cards' hidden fees, it's probably best to go to these places, which will give you their fees upfront, so you won't get any surprises. However, beware of relying on kiosks, as they often have high exchange rates and could have you carrying too much cash at one time.

2.Travelers Checks. If you want a sense of security while traveling abroad, you may find travelers checks to be helpful. But as far as I'm concerned, every time you buy traveler checks, you're giving the check issuer an interest-free loan. Ever wonder why they also give you a handy wallet in which to carry them? They're hoping that when you return you'll put them—unused—in your dresser drawer. Of course, there's  the safety consideration: If lost or stolen, travelers checks will be replaced by the issuer, free of charge. They are also computer-proof, so no mechanical glitches can harm them, unlike with some ATMs. However, if you try to cash them at a foreign bank, you may be hit with a 10-percent charge in fees and high exchange rates.

Here are some tips for traveler's checks:

• Get checks that are issued in dollar amounts, since they will most likely be more accepted abroad.

• American Express, Visa, or Thomas Cook Travelers Checks are three of the most widely accepted in Europe.
• Buy checks in different denominations. Use $100 checks when you're at the start of your trip and $20 checks when you're almost leaving, so that you won't be left with extra foreign currency.

3. ATM Cards. They're a good way to get the most out of your dollar, because most will charge you a flat fee and not a percentage of your transaction. But, beware of $1 to $5 withdrawal fees that can really hurt if you hit the ATM too often. Try to steer clear from independent ATMs that are likely to charge you more than the machines at the bank. Of course, the most favorable ATM to visit is your own bank’s, because it won't charge you transaction fees as high as a competitor’s. However, your bank may not have any branches in Europe.

4. Credit Cards. Credit cards also have percentage fees you should be wary of, but the percentages could be far less than the other currency options on this list. Of course, this rate depends on your specific credit cards. Fees are based on the day's exchange rate when you made your purchase, so the exchange rate is usually the best of the currency options I’ve presented. However, beware of credit cards linked with certain banks. You might get charged double fees from the credit-card company and from the bank itself. Talk to your credit-card company and bank about their specific overseas fees before you head to Europe.