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5 money saving tips for exchanging currency

By WTOP Staff

JOSEPH PISANI
AP Business Writer

NEW YORK (AP) — Headed overseas for summer vacation? It’s easy to get hit with extra fees and expensive exchange rates when switching currencies.

Some currency exchange tables in airports and tourist areas offer bad rates, taking more of your money. And some credit cards and banks can add fees when you buy something with your card.

Your best bet is to bring a credit card that doesn’t charge currency exchange fees and some cash for backup. Most purchases should be done on the credit card, says James Gambaccini, a certified financial planner at Acorn Financial Services. That’s because credit cards offer fraud protection. If you lose cash, or it gets stolen, you won’t get it back. Lost credit cards, or fraudulent charges, are easily replaced or fixed, says Gambaccini.

“Walking around with a money belt and a large amount of cash is not relevant anymore,” he says.

Here are five tips to maximize your dollars:

1. GET AN APP

Before boarding the plane, download a currency converting app on a smartphone you plan to use on vacation. You can open up the app to see if you’re getting a good deal when exchanging money. With the apps, you type in the amount you want to exchange and it will calculate a figure in the new currency. There are several free ones to choose from, including XE Currency and GlobeConvert.

2. ASK BEFORE YOU EXCHANGE

Be wary of currency exchange places that say they don’t charge fees or advertise really good exchange rates. “Don’t trust it,” says Stan McGahey, an international tourism professor at Saint Leo University in Florida. Often, they will offer you a worse exchange rate to make up for the low fees or have caveats that they don’t advertise. Instead of just handing them your money, ask how much you would get for the amount you want to exchange first, McGahey says. That way you will know exactly what you’re getting.

And always do currency exchanges in the country you’re visiting. You’re likely to get a better rate than if you do the exchange at home, McGahey says.

3. FIND THE RIGHT CARD

Get a credit card that doesn’t charge a foreign exchange fee. Some will charge a 2 percent to 3 percent fee for every purchase made with a foreign currency, says Matt Schulz, a senior analyst at credit card comparison site CreditCards.com. There are many that don’t. You can find a list of them on websites such as CreditCardInsider.com, CreditCards.com or Bankrate.com.

Not sure if your card charges a fee? Call and ask.

If you don’t have a fee-free card, it may be worth applying for one, says John Ganotis, founder of credit card comparison site CreditCardInsider.com. As long as you’re not charging more than you can afford to pay, it could be a better deal than exchanging cash. Most credit cards designed for travelers let you earn benefits, such as miles or points to use for a future trip, Ganotis says.

Another benefit: credit cards often will offer exchange rates that are an average over the past month. That could be helpful if you are traveling to place where the currency is volatile, including some South American countries, Gambaccini says.

(Incidentally, you should call your credit card company before traveling to let it know where you are going. If the credit card company doesn’t know you’re traveling, it could think it is being used fraudulently and temporarily block your card from making charges.)

4. SAY NO TO HOTEL EXCHANGES

If a hotel or another business asks if you want them to convert the bill into American dollars for you, decline. The exchange rate can be bad, Gambaccini says. Instead, let the hotel bill you in the country’s currency and let your credit card do the exchange.

5. CHECK OUT CHECKING ACCOUNTS

As with credit cards, make sure your bank doesn’t charge foreign exchange fees if you plan to use a debit card. Some may charge a flat fee for using a foreign ATM on top of a percentage for currency exchanges. Checking accounts at online banks, such as Capital One 360 and Charles Schwab Bank, don’t charge foreign transaction fees. Call your bank and ask if you’re not sure if they charge fees. Personal finance website NerdWallet.com publishes a list of banks that don’t charge fees.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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