I'm traveling overseas in 3 weeks for the first time and had some questions regarding currency exchange. I'm going to visit Hungary (forint) and Croatia (kuna). For those who have traveled how to recommend I obtain local currency? I have heard of some people who obtain some currency before departing and then obtaining the rest from ATMs overseas. Also, for these particular countries, is it still better to use local currency (forint and kuna) rather than the Euro? I've read that in both places the locals still prefer their local (non-Euro) currency--but wanted to confirm this. Any and all advice/recommendations will be much appreciated. Thanks.
1 - Obtain your local currency in that country, from a bank-operated ATM (they don't charge fees at their end). Hopefully, you have an account and an ATM card (not a credit card) with a bank that does not charge fees for ATM withdrawals, e.g. CapitalOne or Charles Schwab, or various credit unions, and if not, then open one before you travel. Your only cost will be the roughly .8 of 1 percent that the Plus/Cirrus networks have as internal friction for this, you will otherwise be getting your money at the current interbank exchange rate, plus that .8% charge. Any other option will cost you more money to obtain your currency. You should be able to find such ATMs at any airport/train/bus station that you arrive in the country at, or in the immediate vicinity of outside, and you can easily search the system online for the locations of ATMs that meet the criteria.
2 - Along that same idea, you will find places that will be happy to accept your Euro, but not at the conversion rate. Expect anyone accepting non-local currency to charge you significantly in the exchange rate, this could be over 10%.
3 - Exchange bureaus/money-changers operate the same way, and they will cost you money. Either they will have a high fee for the service, or if they say "no fee", you will see their exchange rate costing you 5-10%.
There are some who will follow my post with a comment such as "why bother" or "it's not significant" or "for peace of mind get some currency here" (which with these two countries I doubt that you can). So I'll add this now - there is no reason to give your money away, especially for nothing in return.
Just to add a bit to Larry's excellent post.
You likely won't find a local bank that can exchange for forints or kunas. So you'll just need to stop at an ATM on arrival.
Personally, I see no reason to open new accounts for a 2 week vacation. Notify your bank of your travels and have their 800 number handy in case they still block your card anyway. And have a backup card of some sort: a different checking account or in a worst case your credit card PIN so you could withdraw a cash advance (and pay through the nose so only in a dire emergency).
Echoing Larry's point #2. Since it is not legal tender in their country, they have no obligation to accept Euro or to give you a fair exchange rate. As if some offered to pay you in Mexican Pesos in US or Canada.
If you bring cash to change, don't bring bills above a $20. Had trouble changing higher bills in Berlin last summer, even at a bank. We use CapitalOne and they do not charge transaction or conversion fees. We bring a few euros with us, for a cab or quick coffee at the airport, then go to the Bankomat and withdraw the local currency. Hope you have fun, you will love both countries. Going there also this summer.
To illustrate the problem with paying in euros, most places that accept them do so by choosing an easy conversion. For instance, currently a euro is going for 7.63 kuna...so a merchant will glady round that down to 7 and convert to make math easy, problem is it costs you about 8%. In other cases, prices may be displayed in Euros, saving you the trouble of converting, but usually again at a much worse rate.
I see it less in Europe, but in Mexico, at tourist spots, I saw many Americans handing over Dollars at 10 pesos to 1 dollar when the exchange rate was 14 to 1. Always best paying in local currency.