The U.S. Dollar Just Matched the Euro. Is It Time for a European Vacation?
- On July 12, 2022, the U.S. dollar and the euro reached an equal value.
- American tourists traveling abroad could benefit from more favorable exchange rates.
For the first time in nearly 20 years, the value of $1 U.S. dollar is equal to 1 Euro.
If you're an American who is planning a trip to Europe, you may be able to benefit from favorable exchange rates. The U.S. dollar and the euro are now equal in value for the first time in two decades. What does this mean for tourists? Since the U.S. dollar will go further in many European countries, could this be a good time to plan a vacation?
The euro continues to lose value against the U.S. dollar. In the early morning of July 12, the U.S. dollar matched the euro for the first time in years. This is big news and not typical.
Around this time last year, $1 U.S. dollar was worth around 0.84 euro. At that time, $500 would equal around 420 euros. When the U.S. dollar and the euro match, $500 equals 500 euros.
This is a big difference. The last time the currencies were equal was in late 2002.
Your money will go further
What does this mean for American tourists going to Europe? American travelers can benefit from the U.S. dollar being equal to the euro.
Your money will go further than it usually would when traveling in countries where the euro is the official currency. While the euro isn't accepted in all parts of Europe, 19 countries use this currency.
It's also easier to figure out how much something costs when currencies are close to or equal in value, eliminating the need to use a currency calculator app while traveling.
Should you plan a European vacation?
With favorable exchange rates, you may wonder if now is a good time to take a European vacation. You'll likely benefit if you already have a trip starting in the coming weeks or days.
For those who have yet to make trip plans, make sure that you consider other factors. While the exchange rate is favorable, travel as a whole costs more these days.
You'll likely be paying higher costs when buying a plane ticket, booking a hotel, or making other reservations. That means higher travel costs may cancel out the savings you get from a favorable exchange rate.
You should also consider the current state of the global economy and your own financial situation. If you have extra money in your savings account and can afford to travel internationally, taking a trip might be a good option.
But if you have minimal savings, you may want to hold off until you're in a better financial position to travel. If you start saving up now and follow a vacation budget, you can take an affordable trip in the future.
Use a credit card with no foreign transaction fees
When traveling abroad, bring the right credit card with you.
You'll want to use a credit card with no foreign transaction fees. Cards with these fees typically charge a fee of 3% for every foreign transaction.
If you take a trip to France and spend $1,000 and use a credit card that charges a 3% foreign transaction fee, you'll be paying $30 in extra fees.
Think ahead before you depart for your next trip abroad to avoid unwanted additional fees.
Luckily, many no foreign transaction fee credit cards don't charge this fee. A lot of these cards are geared toward travelers. To earn rewards on your travel spending, check out our list of best travel credit cards.
Alert: highest cash back card we've seen now has 0% intro APR until nearly 2025
If you're using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2023 The Ascent. All rights reserved.