“A nickel ain’t worth a dime anymore.”
3 Top Foreign Banknotes and Coins Tips
Fifty Plus Nomads can easily avoid problems using foreign banknotes and coins by following these three simple using foreign banknotes and coins tips.
Tip One: Use Crisp Foreign Banknotes, If Possible
- In some less-visited countries, you must ensure that you have a local banknote without tears. Vendors and banks sometimes will not accept bills that are not in good condition. With each year, there is less circulation of bills in lousy shape. Most countries now have currency made of plastic that doesn’t tear easily.
- If you find yourself in some countries without many tourists (like Haiti or many sub-Saharan African countries) using US dollars, the banknotes need to be crisp. Finding change for any denomination above a $5 bill may also be difficult.
- Try to keep the small change, especially when visiting Third World Countries. Vendors (particularly itinerant ones) may not have change for large denomination banknotes. They may have to go searching for change among other vendors. (Note: You may have this problem with US and local currencies with any banknote worth more than $10). Sometimes (particularly in poorer countries), you may not be able to get change at all. (When this happens, I buy enough stuff to use the banknote).
Tip Two: Avoid Problems Using Foreign Banknotes and Coins
- Look at the money carefully before accepting it. In some countries, the currency changes frequently. Some unscrupulous vendors may attempt to foist old banknotes that no longer are legal tender on unsuspecting tourists. Some countries also have a lot of counterfeit banknotes. (In 2021, I may have two counterfeit 500 Mexican peso banknotes. The government is phasing in new bills, and some people take advantage of passing off fake old banknotes).
- Sometimes countries have old and new currencies. Haitian businesses often quoted prices in old gourdes when I was there in 2014. Until several years ago, there were eight gourdes to one US dollar. Before 2014, the Haitian currency exchange rate began to ¨float¨. In other words, the currency market determines the exchange rate. The rate changes daily. In Haiti, the exchange rate was 48 gourdes to one US dollar. Therefore, in the shops that quoted prices in old gourdes, I had to pay six times the quoted price for the items (6 times 8 equals 48) in new gourdes. (Note: Only new gourdes were in circulation). If the price was in old gourdes, I had to multiply the amount by 8 to get the price in US dollars. (Haitian merchants usually gladly accept US Dollars).
- Some countries have an old and new currency in circulation simultaneously following a period of inflation. When I was in Poland in 1995, they had both old and new zlotys in circulation. The old zloty was worth 22,000 zlotys to a dollar; the new currency was 2.2 zlotys to a dollar. (A new zloty equaled 10,000 old zlotys). Therefore, if I bought something that was 10,000 old zloty and gave the vendor a 20,000 old zloty note, I would get back one new zloty or a 10,000 old zloty bill.
- A few off-the-beaten-path countries’ exchange rates and currencies can get even more complicated. Some countries have different exchange rates for travelers and locals. Cuba, for example, has the Cuban peso for locals and the convertible peso for tourists. (The exchange rate for the Cuban peso is at par with the US dollar. Locals use convertible pesos to buy goods from outside of Cuba).
Tip Three: Don’t Have Leftover Foreign Banknotes and Coins After You Leave the Country
- Avoid using foreign banknotes and coins outside of their original country. Most of the time, you will receive horrible exchange rates for foreign currencies outside the country of origin. On a rare occasion, you may not be able to find any place to make the exchange at all. (Be especially careful when dealing with “soft” currency. Weak currencies are currencies that investors do not want to buy because they are assumed to be unstable. Hard currencies, those that the currency markets wish to, are limited, usually to the Euro, British Pound, Japanese Yen, and Swiss Francs).
- You will not be able to exchange foreign coins outside of the country of origin. If you are not paying attention, you can be stuck with many coins that will be worthless outside of the country. (I occasionally end up with many coins when I leave places, like the European Union and Canada, where the smallest denomination bill is five dollars or Euros. When this happens, I set the change aside and spend it when I return).
Do You Have Some Leftover Foreign Banknotes and Coins?
Here are some valuable tips for using foreign currency and coins in Europe from Rick Steves.