Before You Travel: 8 Tips for Using Money in Japan

Whether it’s your first time traveling to Japan or you’re a globe trotter who loves revisiting, these 8 Japan money tips can help you save time and money throughout your trip!

Takeaways

1. Carry Japanese cash, aka yen, throughout your trip.
2. The best way to get Japanese cash is from an ATM in Japan.
3. ATMs are easily found in the airport or at convenience stores such as 7/11, Family Mart, and Lawson.
4. Withdraw cash using a bank account that waives ATM fees, such as the Charles Schwab Investor Checking.
5. Use a credit card with no foreign transaction fees.
6. Select the local currency when paying with a credit card.
7. Add Suica or Pasmo to your iPhone.
8. Shop tax-free to get up to 10% off.

1. Japan is still a cash-based society.

Although Japan is a technologically advanced and modern society, using cash is still a big norm within the country. While more and more businesses do accept cards, you’ll still find many services that only take cash. You’ll need to carry cash, the Japanese yen (JPY), throughout your trip, and roughly 200-400 JPY per week is enough depending on whether you’re traveling on a budget or have some room to spend on food, souvenirs, admission fees, etc. So how should you exchange currency for Japanese yen?

2. Should I exchange money before I travel to Japan?

If you’re coming from the U.S., the best thing to do is to withdraw cash from an ATM in Japan. Most Japanese ATMs are linked to international cash networks, and any large bank is likely a member of these networks. Withdrawing from an ATM in Japan will usually have a better exchange rate than exchanging at a currency exchange or at a bank.

3. Where to find ATMs in Japan?

Airports have ATMs so you can withdraw as soon as you land. Note that international ATM cards (aka your debit card from a major bank) do not work with certain ATMs in Japan, specifically bank ATMs. The ATMs that do work include the ones at the airport and in convenience stores, such as 7 Eleven, Family Mart, and Lawson. These convenience stores, known in Japan as “conbinis” are everywhere in major cities, so you don’t need to go out of your way to find one. Plus, Japanese convenience stores are on a whole other level compared to the 7 Elevens you see in America. It’s a must-do activity for any first time travelers to visit a 7 Eleven and other convenience stores to see the variety of snacks and offerings available to consumers.

4. What about ATM fees?

You can avoid ATM fees by using a bank account that waives ATM fees. My favorite is the Charles Schwab Bank Investor Checking account which reimburses ATM fees. That means you pay zero ATM fees! This account is great not just for travel but also in general when you need to withdraw cash in any situation. I’ve used it both internationally when I’m traveling and domestically when I unexpectedly need cash.

When you open an Investor Checking account with Schwab, it comes with opening a brokerage account at the same time. Thankfully, neither accounts have any monthly fees, so it’s completely free!

5. Avoid fees by using a credit card with no foreign transaction fees.

At businesses that do accept credit card, you’ll definitely want to use your credit card to accumulate those points, as long as your card has no foreign transaction fees. Otherwise, credit cards with foreign transaction fees will charge around an extra 3% of each transaction in fees, and that number can vary according to the card or the card issuer. Avoid these fees by getting a card with no foreign transaction fees!

Some popular cards with no foreign transaction fees include the American Express Platinum, American Express Gold, Chase Sapphire Reserve, Chase Sapphire Preferred, and the newer Capital One Venture X. These cards cards are great for folks who travel often because of the whole package of travel benefits. These cards do have an annual fee for each year you use the card, so if you’re looking for a no annual fee card, NerdWallet has compared several excellent card options.

Remember: only spend what you can afford. You never want to build up credit card debt by spending when you don’t have money to pay off the balance in full.

If you’re considering applying for a new card, you can use my referral links: Amex Platinum, Chase Sapphire Reserve, Capital One Venture X.

6. Avoid fees by selecting the local currency (JPY) when paying with a credit card.

When you use a credit card abroad, you’ll be asked to select between the local currency (JPY) and your home bank’s currency (such as USD). For example, when charging a hotel stay to your card, you’ll need to select whether you want to pay 100 JPY or $80 USD. While the $80 amount provides you the convenience of converting the purchase price to your home currency so that you know exactly how much your paying, it comes at a price, literally. It’s what known as “currency conversion fees” or “dynamic currency conversion” and effectively means you’ll pay extra, such as 6% in additional fees, often hidden within the overall price. Save yourself money by always selecting the local currency — in this case JPY.

7. Add Suica or Pasmo cards to your iPhone.

When you’re in Japan, you’re likely going to use the public transit system, and Suica and Pasmo cards are the most common forms of cards you’ll use to pay for trains and buses throughout Japan. You can add these cards to your Apple Wallet on your iPhone for ease of use when taking public transit. Why go through the hassle of pulling out your wallet and digging to find your card in the middle of a busy station, when you can easily pull it up on your iPhone to scan. And reminder to enable “Express Transit Card” in the “Wallet & Apple Pay” settings so that you can scan the card without requiring Face ID or your passcode. Your card may also be available even when your iPhone runs out of battery!

What’s the difference between Suica and Pasmo? They’re pretty much the same thing, with some minor differences outlined here if you must know.

8. Shop tax-free to get up to 10% off.

Some businesses offer tax-free goods and services, which means you’ll get a 8-10% discount off your purchases for being a tourist! You’ll usually see a sign for tax-free if it’s available. Here’s a cheat sheet of what you need to know to get the tax exemption:

1. Your purchases at one store on the same day must meet a minimum of 5,000 JPY.
2. You must present your passport with an entry stamp to get the tax exemption. Passport copies such as photos or photocopies are not accepted. Upon entering Japan, the immigration office normally stamps your passport to indicate that you’ve entered the country. However, with the newer systems, you might find yourself using an automatic gate to enter, and your passport does not get stamped. You can still get an entry stamp by asking an immigration officer, which you need to do if you plan to shop tax-free. When I visited Japan in April of 2023, most travelers were directed to the human immigration officer, so chances are you won’t have to worry about the automatic gate.
3. You can claim the tax exemption either (A) at the time of purchase from the store directly if available or (B) by visiting a designated tax exemption bulk deduction counter with you purchases, receipts, and passport to process the tax exemption on the same day as your purchases. For example in situation (A) I did some shopping at the flagship Muji store in Tokyo where you had to go to a specific check-out counter to receive the tax exemption, and the line for that check-out counter was long. I waited 30 minutes in line to check out, and when I finally got to the front, I showed them my passport with my entry stamp and paid the tax-free price.

For a longer in-depth guide to tax-free shopping in Japan, check out this article.