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“It was the most remote border crossing I’d ever seen, deep in the bush between Senegal and Guinea,” says Alissa Bell of Exploring Wild. “We’d walked for a day to get there and still had another day to the next town. The local village elder was happy to change a bit of money for me [and] I knew just enough French to understand that the exchange rate he quoted was ridiculously low.
“Fortunately, I had the official rate downloaded to my phone in a currency exchange app,” she adds. “We negotiated for a while, me pointing at my phone and smiling, him gradually upping his number, until we reached a reasonable compromise.”
Visiting a foreign country, whether for business or pleasure, is an incredible opportunity to soak in the cultural differences that make travel rewarding. But as anyone who has spent time abroad knows, planning a trip to an international destination also presents different challenges than a journey across the U.S.
One of the biggest questions posed by international travelers is, “What’s the best place to exchange currency before a trip?” There are certainly a wealth of options — airport kiosks, ATMs, credit and debit cards, and even street-side money changers are a few of the choices travelers may have. But unless you know which one offers the best exchange rate, you could wind up losing hundreds of dollars.
At the most basic level, before you arrive at your destination, you’ll want to understand local customs and know roughly what a fair exchange rate will be. And even if you’re not planning a trip to rural West Africa, Bell’s experience teaches important lessons that we can all use.
Here’s what to consider when planning a trip abroad, as well as the best place to exchange currency before and during a trip.
Why knowing how to exchange your money matters
Travel professionals often tell their clients to use a credit card designed for international travel when journeying overseas. But even in first-world countries, cash is occasionally king. Developing a strategy before you leave to access local currency will help you save money at your destination later.
“My biggest tip is to know the preferred transaction method in the country you’re headed to,” says Kate Sullivan, head of experience for Otis Travel. “Even in Europe, this can vary. For example, you have to have cash if you plan to shop local, or even at many restaurants and cafes, in the Netherlands,” she adds.
Even if travelers at your destination typically pay with a card, it’s still wise to keep cash on hand. This is especially true if you’ll need to pay gratuities or if there’s a possibility that you’ll take an unplanned excursion where local currency is the only payment option.
So, what’s the best way to have that cash on hand in the proper currency? Here’s our No. 1 recommendation for what to do — and also the single biggest no-no.
Use a local ATM with a no-foreign-transaction-fees checking account
It isn’t always easy to get access to local currency on the ground without getting charged an arm and a leg in the process. Travel veteran Ian Ropke of Your Japan Private Tours knows a thing or two about the best ways to exchange currency. While Ropke doesn’t advise traveling with too much cash for safety reasons, he does recommend looking for the best banks that offer no-fee debit withdrawals from international locations. “Charles Schwab Bank ATM cardholders are fully reimbursed worldwide, unlimited, for any and all local ATM charges,” Ropke says.
The Charles Schwab High Yield Investor Checking Account caters to Schwab’s investor customers and offers helpful travel benefits. The Visa debit card associated with this account is accepted in hundreds of countries around the world. And Schwab will reimburse unlimited ATM fees no matter where you are, provided you’ve linked your Schwab checking account to your Schwab investor account. Even better, there are no account minimums, monthly fees, or foreign transaction fees, unlike other providers.
Online bank SoFi is another option. Similar to Charles Schwab, SoFi Checking and Savings provides you with a Visa debit card, reimburses international ATM fees, and doesn’t require a minimum deposit. It also won’t charge overdraft fees, and you don’t need to have a linked investor account. Plus, seeing the interest you’ll earn on your SoFi checking account may push you into seriously considering banking there, even if you previously had reservations about online banking.
Aside from the brokerage account requirement, the biggest difference between Schwab and SoFi is the annual percentage yield offered on each account. SoFi offers a robust APY of 4.60% with direct deposit, while Schwab offers 0.45% (as of May 23, 2023).1 Here’s how they look when compared side by side:
| Schwab Bank Investor Checking | SoFi Checking and Savings | |
| ATM fee reimbursement | Yes | Yes |
| Account minimum | None, if you link your checking account to your Schwab One brokerage account | None, with no brokerage account required |
| Monthly fee | None | None |
| Foreign transaction fee | None | None |
| APY | 0.45% (as of May 23, 2023) | 4.60% with direct deposit |
The big no-no: Don’t use the airport currency exchange kiosk
Ah, the airport currency exchange kiosk. It’s right there, waiting for you! So easy, right? But what the kiosk offers in convenience, it loses in value.
Travel blogger Jeff Miller of Our Passion for Travel observes, “Airport exchanges are the worst in most western countries. I see people exchanging large wads of cash at airports and sometimes paying a spread of up to 20% for the privilege. You probably shop around for the best price on flights — why would you pay the going rate at the airport?”
If for some reason you do need to get cash right when you land and haven’t planned ahead to open a no-fee checking account, Phil Sylvester, head of public relations and media at World Nomads, suggests the alternative of using your home bank debit card to withdraw cash in the local currency at the destination airport. “The best exchange rate is the interbank rate, which is exactly the rate your ATM withdrawals are calculated at,” he says. “I always use my home card to withdraw cash, usually at the destination airport.” Just be aware that using this method means you’ll likely pay foreign ATM fees and foreign transaction fees.
You can also try lesser-known sources for affordable currency exchange at your destination. “If you must exchange USD (U.S. dollars) for local currency, sometimes local post offices will do this for a nominal price with true market rates,” says Newsha Tarifard of TravelWell Adventures.
Overall, your best bet is still going to be planning ahead and being ready with a debit card from a bank like Schwab or SoFi that won’t charge foreign ATM or transaction fees.
If you need to exchange currency before you leave on your trip
If you’re like many travelers who don’t happen to know offhand what a good exchange rate is for the yen, euro, peso, or any other currency, the first step is to educate yourself. Assuming you’re an internet surfer and smartphone user, your life just got a bit easier — currency conversion websites such as XE can show you live exchange rates.
The second step would be to order the appropriate currency. Travelex is a trusted currency exchange source you can count on if you want to acquire the appropriate cash before you travel abroad. Check its fees ahead of time so you know what you’re getting into, though, and don’t be afraid to price shop when ordering currency.
For example, did you know your local bank can likely order foreign currency for you, too? Make sure you check in with your bank and order the exchange well in advance of your scheduled travel, though. Banks don’t typically keep a large variety of currency in stock, especially in large amounts.
Minimize cash needs and use credit cards when you can
Seasoned travelers recommend using a credit card with no foreign transaction fees because you’ll typically get the best exchange rate and save money. Stay in a premium hotel in Paris, London, or Hong Kong and — without the right credit card — you could find yourself paying 3% of your bill just for the privilege of using your card.
The key to success is reading the fine print on your card’s terms and conditions. If you don’t see international travel benefits, consider applying for a new travel rewards credit card. The Chase Freedom Unlimited®, Chase Sapphire Reserve®, Capital One Venture Rewards Credit Card, American Express® Gold Card, and The Platinum Card® from American Express are all great options to consider. Plus, you could earn travel rewards for your next trip.
In addition, when you use your card, make sure you ask to be charged in the local currency. That’s because your card issuer will likely give you a more competitive exchange rate than what the merchant will if you choose to pay in USD. That goes for all foreign transactions — not just for large charges.
“Very often when you pay for something on your credit card in a foreign country, the payment machine will give you the option to bill you in local currency or in U.S. dollars,” says Nick Brennan, founder of My UK SIM Card. “In my experience, [paying in USD] can equate to paying 10% or more. I never, ever accept the US dollar converted amount and I always pay in the local currency!”
The bottom line on the best place to exchange currency
Now that you know why you may need to carry cash, how to access it fee-free using your debit card, and why you should charge bigger expenses in local currency with a no-foreign-transaction-fee credit card, you can get back to the business of enjoying travel and getting to know the local culture. If you haven't yet planned your big trip but are on a budget, you may also want to take a look at countries where the U.S. dollar goes the furthest.
Bell, once she was able to get a fair rate on her Guinean franc currency exchange, enjoyed a laugh with the elder who helped her out.
“When he finally realized the discrepancy, we both laughed, he pulled another bill out of his shirt pocket, and that was that,” she says. “We settled back in for another round of sweet Senegalese tea.”
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