The Cheapest Ways to Exchange Currency When Traveling

Every trip abroad involves a money decision: how will you pay for things? Cash from home, an ATM on arrival, your credit card, a travel card, or the exchange booth at the airport? Each option has different costs, and the differences can add up to a meaningful share of your travel budget. The goal is to get as close to the mid-market exchange rate as you reasonably can while keeping your money safe and accessible.

The two costs to watch

Almost every currency transaction has two potential costs:

1. The exchange rate spread: the gap between the mid-market rate and the rate you get.
2. Explicit fees: foreign transaction fees, ATM withdrawal fees, flat commissions, or delivery fees.

A cheap option keeps both low. A provider advertising "no fees" can still be expensive if its rate is far from the mid-market. Always ask how much foreign currency you will end up with in total.

Option 1: Credit cards without foreign transaction fees

For purchases in places that accept cards, a credit card with no foreign transaction fee is often one of the cheapest options. Card networks generally apply exchange rates close to wholesale levels. The catch is the fee: many cards add a foreign transaction fee, often around 3%, while travel-focused cards often charge none.

Watch for: dynamic currency conversion at the terminal, where you are asked to pay in your home currency. Always choose the local currency.

Option 2: Debit cards at local bank ATMs

For cash, withdrawing local currency from a bank-owned ATM at your destination is often cheaper than exchanging cash before you leave. Costs can include:

• Your own bank's foreign ATM fee or foreign transaction fee
• The ATM operator's fee
• Dynamic currency conversion offered on the ATM screen

Some banks and credit unions reimburse ATM fees or waive foreign fees. Withdrawing larger amounts less often reduces per-withdrawal flat fees, but balance that against the risk of carrying cash. Prefer ATMs attached to bank branches over standalone machines in tourist areas.

Option 3: Your bank or credit union before you leave

Ordering foreign currency from your bank lets you arrive with cash. Rates are usually better than airport kiosks but not as good as card networks. There may be a delivery fee or minimum order. This works well for a small amount of arrival cash or for destinations where ATMs are scarce.

Option 4: Airport and tourist-area exchange kiosks

Kiosks are convenient, but they often have the widest spreads, sometimes combined with fees. If you must use one, exchange only what you need for the first few hours: transport, a meal, and a tip.

Option 5: Multi-currency accounts and travel apps

Some financial technology companies offer accounts or cards that hold multiple currencies and convert near the mid-market rate with a transparent fee. They can be useful for frequent travelers or for long stays. Check fees, limits, and whether funds are held at an insured bank.

Worked example (illustrative numbers only)

The rates and fees below are hypothetical and simplified, used only to show how to compare options.

You are spending the equivalent of $1,500 on a trip. Assume a mid-market rate where $1,500 equals €1,350.

In this illustration, the gap between the best and worst choices is close to €90, enough for a nice dinner or a day of local transport.

A simple travel money plan

1. Before you leave: find out whether your cards charge foreign transaction or ATM fees. Consider getting a no-foreign-fee card if you travel often.
2. Notify your bank if required, and save your bank's international phone number.
3. Carry two payment methods stored separately, such as a credit card and a debit card.
4. Arrival cash: have a small amount of local currency or plan to use a bank ATM at the airport.
5. During the trip: pay by card in local currency where accepted; use bank ATMs for cash.
6. At the end: spend down leftover cash or keep it for your next trip instead of converting back, since you would pay the spread again.

Safety tips

• Use ATMs in well-lit, busy areas or inside bank branches.
• Cover the keypad when entering your PIN.
• Check for card skimmers on ATMs and payment terminals.
• Keep emergency cash and a backup card separate from your wallet.

FAQ

Should I exchange money before I travel?

For many destinations, exchanging a small amount before you leave and using cards or local bank ATMs during the trip is cheaper than exchanging everything upfront. For places where cards are less common or ATMs are scarce, bringing more cash may be practical.

Is it better to pay in local currency or my home currency abroad?

Usually local currency. When you choose your home currency, the merchant's provider sets the conversion rate, which is often worse than your card network's rate.

Are prepaid travel cards a good deal?

They can be, but compare their loading fees, conversion rates, ATM fees, and inactivity fees with your existing cards. A no-foreign-fee credit card or low-fee debit card often costs less.

Check the reference rate

Before you exchange money, look up the reference rate in the Rateboard currency converter, which shows mid-market rates from European Central Bank data via the Frankfurter API. Compare it with what a kiosk, bank, or app is offering to see the markup.

Rateboard guides are educational and are not financial advice. Fees and rates vary; check with your card issuer and bank.