Years ago, whenever I visited foreign countries, I was very naive. I was armed with travelers checks and felt totally safe. I trusted the vendors to exchange my U.S. travelers checks for the correct change in their native currency. After all, they accepted U.S. dollars (USD), right? And they were in the business of knowing exchange rates, right?

Did I mention I was naive?

But wait, there’s more. To compound my naivete, I was also American. And a Texan to boot! A very dangerous, and monetarily vulnerable combination!

I can’t speak for all non-U.S. countries. But in Grand Cayman, Aruba, Mexico, Honduras, Jamaica, and all points in between, I learned the hard way that skimming Americans was considered legitimate merchant practice. In fact, it was vendor sport to see who could skim the most from the least suspecting. It was not considered unethical or bad trade relations; it was simply the way of tourism. It was what it was. Alas for the merchant who took pity on my sweet, innocent nature and spilled the beans. Or perhaps he had an axe to grind with some of his competitors. For whatever reason, I learned the hard way, but straight from the proverbial horse’s mouth.

This message was confirmed on a later mission trip to Mexico. Our group leader insisted we get our U.S. dollars exchanged for pesos in Laredo — the Texas side — before entering Mexico. Again, there was no ill will associated with our host country. It was simply exercising good sense. But even with pesos in hand, we needed to be on our guard. The clever vendors had learned to expect “educated” tourists by pricing their wares in pesos and USD!

Well, guess what? (Another vendor, whose prices seemed a bit high but who had the most beautiful pottery, put me wise.) Unless you were savvy to the exchange rate on that particular day (or according to that particular vendor), the great prices posted in USD were up-charged in pesos.

The vendor who passed on this wisdom happened to deal strictly in USD. I purchased a $13.00 coffee mug from him to add to my collection. His competitors only charged $7.00 USD. I don’t remember the peso exchange, but, according to the vendor from whom I purchased the mug, the final payment in pesos would have amounted to about the same price he was charging in USD. He showed me a chart to prove his point.

That was a few years ago. And I have no idea who was taking me for the bigger fool. But I do know this:

I was uninformed, ignorant, and vulnerable.

Lesson learned. Technology is now available to help us out with several foreign exchange currency rate converters available online. But how do you know which one(s) to use?

Here are some things to consider:

1. Never pay a commission for using a converter. Small service fee, OK. Commission, no.
2. Look for a high exchange rate, updated daily.
3. Use traveler’s checks instead of cash. But when you do, look for travler’s check exchange rates. The good news is that some of the better exchange rates are for travelers checks only.
4. Use legitimate banking facilities for your exchanges. You don’t want to wind up with counterfeit currency! In some countries, using counterfeit currency could be dangerous to your health!
5. Plan ahead. Before you get to the airport. Airport currency exchange services do not usually offer good rates but do come with a commission attached.
6. Compare the actual currency conversion service to the online rates and get as close to the online rates as you can. The difference in cost is the service fee. A 1% service fee is a very good rate.

That said, here are some good online converters:

Google (For this you’ll need to know your currency names or codes. For example, to find out how much $100 US is in Mexican Pesos, you’ll type in 100 USD in MXN or 100 USD in Pesos)

Universal Currency Converter

http://www.xe.com/ucc/

Yahoo Finance – Currency Converter

http://finance.yahoo.com/currency

FXConverter

http://www.oanda.com/convert/classic

or simply use this widget:

And now you know too. Happy traveling!