Where to Exchange Money When You Travel, Ranked From Best to Worst
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If you’re a frequent traveler, you’ve probably seen those Travelex currency exchange kiosks at airports all over the world.
They claim to have great exchange rates, but is the airport really the best place to change your money when you’re traveling abroad? (Spoiler: nope!)
If you’re traveling to another country, what’s the best way to get foreign cash? Read on to find out where to exchange currency, ranked from best to worst.
#1. Don’t exchange money: Use a no foreign transaction fee credit card instead
In my opinion, the best way to exchange money when you travel is not to exchange money when you travel — use a credit card instead.
Why? Well, there are several travel credit cards that don’t charge foreign transaction fees when you make purchases abroad.
You won’t lose money when you book hotels or go shopping, and you could even earn some back as rewards points or airline miles. Plus, several of these cards offer extra perks for travelers, such as access to airport lounges and car rental insurance.
Of course, you need to make sure you don’t spend beyond your means and are only making purchases you can afford to pay off each month. If you let your balance creep too high, you’ll end up paying interest on your purchases, which defeats the whole purpose of using a no foreign transaction fee credit card.
The other potential downfall is if you’re traveling somewhere that requires you to pay in cash. When I spent a few weeks in England, I was able to use my credit cards the entire time without ever taking out a single pound. But a few weeks ago when I went to Mexico, relying on plastic wouldn’t have gotten me very far; I definitely needed pesos in hand to pay for food, tickets, and other travel expenses.
If you’re headed to a big, modern city, you might not need to worry about taking out cash at all. But if you’re not, keep reading for your next best option.
#2. Take out cash from an ATM when you arrive (but watch out for withdrawal fees)
Instead of exchanging your U.S. dollars for Euros, pesos, or yen, withdraw foreign currency from an ATM once you get to your destination. You typically won’t lose as much money when you withdraw from an ATM as you would when you exchange.
That said, most banks charge fees for taking out money in another country, as do some ATMs. So find out what your bank charges to take out money in another country. If the fee is high, consider switching banks.
For instance, I used to have an account with Santander, which currently charges $6 for each international withdrawal, plus 4% of the amount you took out. Taking out just $100 could cost you $10! Not impressed, I switched to Ally, an online bank that only charges up to 1% on foreign withdrawals.
A lot of travelers also swear by Charles Schwab, which charges no foreign transaction fees whatsoever and will even give you unlimited refunds for any fees charged by the ATMs you use. If you travel a ton, consider switching to a bank like Charles Schwab so you’ll never lose money on international transactions.
And if your bank does charge fees, consider taking out a big chunk of money from the ATM at once. Head to one close to your hotel or Airbnb, so you can stash most of it in a safe or your suitcase and aren’t walking around with a ton of money in your wallet.
#3. Buy foreign currency from your bank or credit union before you leave
If you’d feel more comfortable having cash on hand when you land in your destination, consider purchasing some from a bank or credit union before you leave. Several banks have Euros and other kinds of money on hand available for purchase. Or they’ll let you place an order and pick up the money later.
Since the process can take some time, plan your order well in advance of your trip. If you pop into your bank the day before you leave, you could be out of luck. Plus, find out what the bank charges for this service, as some charge a fee for the purchase of foreign cash.
#4. Order some foreign currency online from a conversion website
You can place an order, and it will be delivered straight to your home. But if you’re going this route, make sure to place your order well in advance of your trip, or you could have foreign cash sitting on your doorstep while you’re halfway across the world.
And again, watch out for any fees involved in the process; some online exchanges have especially high fees (exchange + delivery fees) if you’re only ordering a small amount of money.
#5. Exchange your dollars in person (preferably not at the airport)
Exchanging your U.S. dollars for foreign money at a currency exchange comes in last on the list. Although it’s an easy way to get some cash, you’ll likely lose the most money in the transaction. Rick Steves estimates a loss of 8% of your money each time you exchange money, and sometimes as much as 15% if you use a Travelex exchange at the airport.
Those airport exchanges assume people are feeling stressed and anxious about their trip, and they’ll pay anything for the peace of mind to get some foreign money. So they can pretty much charge whatever they want, since they know they’ll get some customers who don’t want to show up in their destination empty-handed.
Of course, peace of mind is important, and if you find yourself at the airport worried about your cash situation, exchanging some money as you wait for your flight could be worth the cost. Traveling comes with unexpected expenses sometimes, so this exchange fee might be one of those for you.
But if you have time to order foreign currency before you leave — or can just rely on ATMs or credit cards once you get there — you’ll be making a savvier choice.
Learn where to exchange currency to avoid hefty fees
The costs of traveling can add up, so you don’t want to waste money on exchange or ATM fees. At the same time, don’t spend too much mental energy stressing about the perfect way to get foreign currency.
By putting some thought into the process before you leave, you can make the best decisions for your finances. For even more finance tips, check out this guide on eight of the biggest money wasters when you travel.