You are going on your dream vacation or an extended business trip and you find yourself needing to exchange money. There are different ways to get money exchanged in another country—some better than others. You can even help yourself by doing a little planning before your trip to ensure you exchange money successfully.

Not all countries, banks and exchange houses have the same rules. It could also be that what one bank rejects, another bank, a block away, will accept. Keep in mind when you strike out at one location that you may be able to exchange money right next door. But it could also mean that some of the money you have with you will be worthless until you get home.

This is written with US dollar in mind, but many of the principles will apply with other currencies.

Before You Leave Home
Check with your bank to see if they have partnerships with a bank in the country you are visiting. It is possible that you could use an ATM in the country you are visiting without paying any transaction fees at either bank. It is also possible that you will pay a very high fee at your local bank as well as a high transaction fee at the foreign bank when using the ATM. Only your bank can tell you who their parters are. Some banks have this information listed on their website.

Get clean, unmarked bills from your bank. When carrying cash to another country, you will want to carry the cleanest bills you can find. If that means standing in line at the bank rejecting any bill that has the slightest marking or fold, then it is worth the effort. It is better to be meticulous at your home bank than to be stuck in a foreign country trying to exchange money that they will not accept because a bill had writing on it.

It is usually easier to exchange bills in denominations of $20 or higher rather than $1, $5 and $10 bills. Coins are all but impossible to exchange.

While at the bank, you may see if they can exchange a small amount of money into the currency of the country you will be visiting. This will be the worst exchange rate you can get, but it may keep you from having to exchange money immediately upon arrival when you are busy with making sure your luggage gets in the right cab. It may take your bank a few days to get the currency you need; therefore, do this several days before you plan to leave.

Let your bank know that you will be traveling to another country. They might put a hold on your ATM card and credit cards if you don't alert them to which countries you are visiting. This is best done by calling the 800 number on the back of your cards.

Exchanging Cash
When you arrive in country you will probably need to exchange money immediately if you did not get any of the local currency before you left. You can exchange money in the airport, but you will not get as good of an exchange rate as you will outside the airport at either a bank or an exchange house. However, to get you to your hotel, you will probably want to exchange at least a small amount of money while still in the airport.

Beyond the airport you will need to find a place that will exchange your money for a fair price. Some banks visibly post what their exchange rates are for dollars and euros. You probably won't see much difference from one bank to another. But taking note of these numbers will help you know the going market price for your money. Remember that exchange rates can change hourly. In some countries this variation can be several percentage points.

When changing money at a bank you may need to show your passport and visa. This varies by country. Often they will want an address of where you are staying. Be prepared with any information they may ask. Not all banks will exchange money unless you have an account at the bank. Keep a sharp eye on all your documents and cash once you hand them over.

There are "exchange houses" too. Many times you can get a better exchange rate in them, but not always. They usually ask for less information when exchanging money. Because they are less picky about the information, they can be more picky about the money they will accept. If one bank or exchange house does not accept the dollars you bring them, then try another one down the street.

Some exchange houses are in rougher parts of town. Be careful and take someone with you who knows the currency and the local language. If you have a friend in the country that you can trust, you may consider letting them exchange your money for you.

Using ATMs to Exchange Money
Usually the best exchange rate you can get is through an ATM. This is even more true if you are not in the capital city of the country. While some countries' exchange rates are nationalized and equal throughout the country, many countries will have great variations (never in your favor) the further away from the capital you travel. However, ATMs will give you the same exchange rate in a remote village as you would get in the capital metropolis. That is, assuming you can find an ATM outside the capital.

There are several different ATM systems used in the world. Most of the time your card will indicate which systems it will work with. When extracting money through an ATM you will often pay a transaction fee for each transaction you do. Therefore, it is in your best interest to withdraw as much money as you are allowed with each transaction. This will lower the percentage you pay to withdraw money. Sometimes it is your bank that will limit how much you can extract in 24 hours, and sometimes it is the foreign bank which will set the limit. Figure out what this limit is so that you can get the most per transaction fee.

Using Credit Cards
It is also possible to use your credit card (or in some cases, your debit card) to make your purchases. When possible, using a credit card on larger purchases will protect you as a buyer. You probably won't be able to use your card at the local artisan market, but you can easily pay your hotel bill with a credit card. Like withdrawing money through an ATM, you will get the best possible exchange rate. Check with your bank to see if they have any kind of fees for foreign transactions that will make it prohibitive to use your credit card.

However you end up exchanging your money while traveling, enjoy your trip by staying safe and protecting any cash or cards you carry with you. If you are traveling in a group, then spread the money among the travelers so that it is harder for a thief to completely ruin your vacation. If you don't have travel partners, you can spread your cash between different pockets and bags.