Currency conversion is one of the easiest ways for travelers to lose money without even fully realizing it. Whether it’s hidden fees baked into airport kiosks, poor rates at hotel desks, or your credit card company charging an additional fee with every tap, the cost of converting your cash can add up fast. Even ATMs can come with myriad markups—some from your bank, some from theirs. And unless you’re paying attention, it’s all too easy to overpay for the simple privilege of accessing your own money.
Fortunately, it doesn’t have to be this way. With a little planning, the right tools, and a few insider tricks, you can stretch your money further—and avoid getting nickeled-and-dimed by middlemen along the way. From choosing the right credit card to sidestepping dynamic currency conversion, here’s how to travel smart and keep your budget funding adventures, not bank margins.
Don’t use the airport currency kiosk
Those glowing kiosks next to baggage claim? Convenient, sure—but also one of the worst deals in town. Airport currency exchanges often charge inflated rates and tack on hefty service fees, preying on jet-lagged travelers desperate for local cash.
“Their rates on average can be 15 percent more than what you would find at an ATM or bank outside of the airport, not to mention the added service fees they will charge,” says Katy Nastro, a travel expert at Going, a website and travel app geared toward helping travelers save money on flights. “Your best bet is ordering currency from your local branch roughly two weeks before the trip to ensure it arrives in time [and that] you are getting the best rate at the time of request.”
Don’t make electronic payments in U.S. dollars
“When using a bank ATM overseas, never choose ‘pay in dollars,’” said Jeff Opdyke, a personal finance expert at International Living. “Too many people think it’s better not to have to convert the currency, but alas, not so much. When you choose to pay in dollars, you’re allowing the merchant or the merchant’s processing company to choose the exchange rate. And [you are] 1,000 percent guaranteed they are going to choose a rate that is disadvantageous to your bank account.”
Opdyke said the same thing goes for using your credit card at a restaurant, hotel, tourist shop, or any other business. If you’re given the option of paying in USD or the local currency, always choose the latter. If prompted to accept or decline a conversion, it’s wise to turn it down.
“You’re once again telling the payment network to let the merchant’s local bank or your credit card company make the conversion for you,” Opdyke said. That’s even true when Uber, a U.S.-based company, is used abroad. The app now charges a 1.5 percent fee for paying in dollars instead of the local currency (to avoid paying the extra cost, you’ll need to go into your account, open your “Wallet” and, under “Preferred currency,” select “No preferred currency,” per a recent NerdWallet story on Uber’s currency charges).
Avoid ATMs that aren’t affiliated with a bank
Not all ATMs are created equal. Those no-name machines in hotels or corner stores often come with inflated fees and terrible exchange rates. Your best bet is to use machines affiliated with major international banks—think HSBC, Barclays, Santander—preferably during business hours in case something goes wrong (for example, your card gets stuck in the machine).
“An ATM that’s more tourist-focused will be easily accessible in tourist hot spots, will likely be unbranded, and can cost you more due to transaction fees and/or dynamic currency conversions,” Nastro said. “Always select the local currency and ‘deny conversion’ rate so you not only get the local currency’s best rate calculated by your bank, but you also avoid the percentage markup for real-time conversion.”
Don’t use credit cards that charge international transaction fees
Some cards are better suited for international travelers, such as the Chase Sapphire Preferred card, the Capital One Venture X card, and the American Express Platinum card (the latter of which is accepted in many countries, but not all, so you should check it’s accepted where you’re going and make sure you have a backup or two). These travel-focused cards don’t have foreign transaction fees (which can be as much as 2 or 3 percent per swipe), and they offer a slew of fraud protections. Better yet, many offer rewards points for travel or dining, so your Paris bistro lunch could help fund your next flight. Increasingly, debit cards are providing the same types of perks, so be sure to check the cards in your wallet before traveling.
Try not to withdraw or exchange too much (or too little) cash
Some countries, like the United Kingdom, New Zealand, and South Korea, are largely cashless, and you can use your credit card for even the tiniest of transactions. In other countries, like Egypt, Morocco, and the Philippines, cash is still very much king, and you’ll need it for everything from restaurant dining to buying local artwork. Do a little research beforehand so you’re not stuck in a cash-only cab with no way to pay; also, try not to convert more than you’ll spend. Reconverting leftover foreign currency at the end of your trip means you’re getting hit with exchange fees twice.
