10 Money Tips for Japan: How to Exchange Money Without Huge Fees

Demi Nguyen
18 Jan 202413:48

TLDRThis video script offers comprehensive travel tips for managing money in Japan, emphasizing the use of no foreign transaction fee credit cards, charging in local currency, and the importance of carrying cash due to many businesses only accepting cash. It recommends using a Charles Schwab debit card for ATM withdrawals to avoid fees and getting the best exchange rate. The script also advises against tipping, using trays for payments, and suggests informing your bank of your travel plans to prevent transaction issues.

Takeaways

  • 💳 Use a no foreign transaction fee credit card to avoid fees when spending abroad.
  • 🌐 Always charge your card in local currency (Japanese Yen) to avoid dynamic currency conversion fees.
  • 💳 Choose credit cards with good exchange rates and no foreign transaction fees for optimal savings.
  • 💰 Carry cash in Japan as many businesses still only accept cash and it's useful to have coins for smaller denominations.
  • 💳 Get a Charles Schwab debit card for ATM withdrawals with no ATM fees, even internationally.
  • 💵 Withdraw cash at ATMs upon arrival in Japan for convenience and better exchange rates than pre-exchanging currency.
  • 🇺🇸 Decline conversion at ATMs; always choose to withdraw in the local currency (Japanese Yen).
  • 💱 Carry an appropriate amount of cash (equivalent to $100 to $300 USD) for emergencies and convenience.
  • 🍴 Do not tip at restaurants in Japan; it may cause confusion or problems. Express gratitude with a simple 'gochisousama deshita'.
  • 🛍 Use a tray when paying to follow local customs; it's not mandatory but appreciated.
  • 📞 Notify your bank before traveling to prevent any issues with credit card or ATM transactions.

Q & A

  • What is the main topic of the video?

    -The main topic of the video is about managing money while traveling in Japan, including tips on using credit cards, getting the best exchange rates, avoiding fees, and handling cash.

  • What is the first tip given in the video for travelers?

    -The first tip is to use a credit card with no foreign transaction fees to avoid paying additional fees when using the card at foreign businesses or for online purchases from other countries.

  • How can travelers avoid foreign transaction fees on their credit cards?

    -Travelers can avoid foreign transaction fees by choosing credit cards that specifically offer no foreign transaction fees, depending on their spending habits and travel frequency.

  • What is the advantage of using a credit card for travel expenses?

    -Using a credit card for travel expenses allows travelers to earn reward points, which can be used for booking flights or other travel-related perks, as well as avoiding foreign transaction fees with the right card.

  • Why should travelers charge their credit cards in Japanese Yen when in Japan?

    -Charging in Japanese Yen, the local currency, helps travelers avoid additional fees associated with dynamic currency conversion, which would occur if they choose to charge in US dollars.

  • How do Visa and Mastercard help travelers get better exchange rates?

    -Visa and Mastercard often offer competitive exchange rates compared to exchanging cash at airports, hotels, or banks, and they publish their daily rates online for easy comparison.

  • What is the recommended method for obtaining Japanese Yen for travelers?

    -The recommended method is to get a Charles Schwab debit card, which reimburses all ATM fees, and withdraw cash from an ATM upon arrival in Japan.

  • Why is it important to carry cash in Japan?

    -It is important to carry cash in Japan because many businesses, especially smaller ones, still only accept cash, and it is necessary to have coins for smaller denominations.

  • How much cash should travelers carry with them in Japan?

    -Travelers should carry the equivalent of about $100 to $300 USD, which is approximately 14,000 to 43,000 yen at current exchange rates, for emergencies and convenience without having to withdraw cash frequently.

  • What is the standard practice for tipping in Japan?

    -Tipping is not standard in Japan and can cause issues as it is not part of the local culture. Instead, saying 'gochisousama deshita' as a formal thank you for the meal is considered a significant compliment.

  • What should travelers do when paying at a store in Japan?

    -When paying in Japan, travelers should use the tray provided to place their cash or card on, as it is the local custom, although directly handing money or a card to the cashier is also acceptable.

  • Why is it recommended to inform your bank about your travel plans?

    -Informing your bank about travel plans can help prevent issues with credit card usage or ATM withdrawals that might be flagged as suspicious due to unusual location or transaction patterns.

Outlines

00:00

💳 Managing Finances for Travelers in Japan

This paragraph discusses the importance of using a credit card with no foreign transaction fees for travelers in Japan. It explains how foreign transaction fees can range from 1% to 3% and can add up to significant amounts, especially on larger purchases. The speaker recommends looking into credit cards that offer no foreign transaction fees, such as the Capital One SavorOne card for infrequent international travelers or the Chase Sapphire Preferred card for those who travel regularly and can benefit from credit card rewards. The paragraph also emphasizes the value of reward points and the potential to use them for booking flights or even business class travel. However, it cautions against using credit cards for those who struggle with budgeting and overspending, as they can lead to financial problems. The key takeaway is to use credit cards wisely, pay off bills in full, and stick to a budget to enjoy the benefits without falling into debt.

05:01

💰 Currency Exchange and Cash Handling in Japan

The second paragraph focuses on the practical aspects of handling currency in Japan. It highlights the importance of using local currency, specifically Japanese yen, when making credit card transactions or withdrawing cash from ATMs to avoid hidden fees associated with dynamic currency conversion. The speaker also notes the prevalence of coins in Japan and the usefulness of a coin purse. The paragraph further discusses the benefits of using a Charles Schwab debit card for ATM withdrawals due to its no-fee policy for both domestic and international ATMs. It provides advice on how to obtain a Schwab debit card and emphasizes the convenience of ATMs in Japan, especially at airports and 7/11 stores. The speaker advises travelers to always withdraw in the local currency and to avoid conversion offers from ATMs, which may result in unfavorable exchange rates.

10:01

🍴 Tipping Culture and Payment Etiquette in Japan

This paragraph addresses the cultural norms surrounding tipping and payment in Japan. It clarifies that tipping is not customary in Japan and may even cause confusion or problems for restaurant staff. The speaker suggests that instead of leaving a tip, which could be seen as a mistake or an insult, travelers can express their appreciation by learning and using the phrase 'gochisousama deshita', a formal way to thank someone for a meal. The paragraph also explains the local practice of using a tray to place cash or cards on when paying, as it is considered more polite than handing money or cards directly to the cashier. Finally, the speaker advises travelers to inform their banks about their travel plans to prevent any potential issues with credit card usage or ATM withdrawals, although the speaker personally has not encountered any such issues.

Mindmap

Keywords

💡Foreign Transaction Fees

Foreign transaction fees are additional charges that are imposed by credit card companies when cardholders use their cards at foreign businesses or for online purchases from businesses based in another country. These fees can range from 1% to 3% of the transaction amount and can significantly add up, especially for large purchases. In the context of the video, the speaker advises using a credit card with no foreign transaction fees to avoid these charges while traveling in Japan.

💡Credit Card Rewards

Credit card rewards are incentives offered by credit card issuers to encourage card usage. These can come in the form of points, miles, or cash back, which can be redeemed for various benefits such as flights, hotel stays, or statement credits. The video emphasizes the value of using a credit card with no foreign transaction fees and the potential to earn rewards points, which can be used to offset travel costs.

💡Dynamic Currency Conversion

Dynamic currency conversion is a practice where a merchant or an ATM offers to convert the purchase amount into the currency of the cardholder's home country. While this may seem convenient, it often comes with a hidden fee that makes it more expensive than paying in the local currency. The video advises travelers in Japan to always choose to be charged in Japanese yen rather than US dollars to avoid this additional cost.

💡Exchange Rates

Exchange rates are the ratios at which one currency can be exchanged for another. They fluctuate based on market conditions and can vary between different financial institutions. Visa and Mastercard, as mentioned in the video, often provide competitive exchange rates that can be more favorable than those offered by banks or currency exchange services. Understanding and comparing exchange rates can help travelers get the most value for their money.

💡Charles Schwab Debit Card

The Charles Schwab debit card is a financial tool that is highlighted in the video for its ability to reimburse all ATM fees, including international ones. This feature makes it an attractive option for travelers who need to withdraw cash while abroad, as it can save them from incurring additional fees. The card is linked to a Schwab Investor checking account, which does not have minimum deposit requirements or monthly service fees.

💡Cash Usage in Japan

Despite being a modern country, Japan still has many businesses that only accept cash payments. It is important for travelers to carry cash, particularly in denominations of 100 yen and 500 yen coins, as credit cards are not universally accepted. The video emphasizes the practicality of having a coin purse to manage the coins that are commonly used in Japan.

💡Traveler-Friendly Cards

Traveler-friendly cards are financial tools specifically designed to cater to the needs of travelers. These cards often offer benefits such as no foreign transaction fees, competitive exchange rates, and ATM fee reimbursements. The video highlights the Charles Schwab debit card as an example of a traveler-friendly card and discusses its popularity and benefits for travelers to Japan.

💡Tipping Culture

Tipping culture refers to the social customs surrounding gratuities in a particular country or region. In Japan, tipping is not a common practice and can sometimes be considered inappropriate or unnecessary. The video advises travelers not to tip at restaurants or other service establishments, as it may lead to confusion or even the staff attempting to return the tip.

💡Currency Trays

Currency trays are small plates or trays used in Japan for placing cash or cards when making payments. It is a customary practice that adds a level of formality and respect to the transaction process. The video instructs travelers to use these trays when paying, as it aligns with local payment customs.

💡Notifying Bank of Travel

Notifying a bank of travel involves informing the financial institution of an upcoming trip abroad. This step is taken to prevent potential fraud alerts or holds that may be placed on the account due to unusual transaction activity in a foreign country. The video suggests that while it may not be necessary for all travelers, it can be a helpful precaution to avoid disruptions while using credit cards or withdrawing cash overseas.

Highlights

Use a no foreign transaction fee credit card to avoid fees ranging from 1% to 3% on your expenses.

Selecting a credit card depends on your travel frequency and spending habits, with options like Capital One SavorOne for infrequent travelers and Chase Sapphire Preferred for regular travelers.

Earning reward points through credit card use can fund significant travel expenses, including flights.

In Japan, always charge your credit card in Japanese yen to avoid hidden fees associated with dynamic currency conversion.

Visa and Mastercard offer favorable exchange rates, often better than banks or currency exchange services.

Carrying cash is essential in Japan as many businesses still operate on a cash-only basis.

The Charles Schwab debit card is recommended for withdrawing cash in Japan, offering reimbursement for all ATM fees, including international transactions.

ATMs in Japan are widely available at airports and convenience stores, making cash access convenient upon arrival.

When using ATMs, always opt for the local currency to avoid extra charges and poor exchange rates.

Obtaining Japanese yen before your trip isn't necessary as ATMs are easily accessible and offer good exchange rates.

If pre-trip currency exchange is preferred, using a bank will generally offer better rates than airport currency exchanges.

Carry between $100 to $300 worth of yen for convenience and emergency purposes.

Tipping is not customary in Japan, and efforts to tip can lead to confusion or refusal.

Use the payment tray provided at cash registers for transactions to respect local customs.

Informing your bank of your travel plans can prevent potential issues with card usage abroad, though many travelers find this unnecessary.

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