How to Exchange Currency While Traveling Abroad

When traveling internationally, exchanging currency is one of the most important—and often overlooked—parts of planning your trip. Whether you’re headed to Europe, Asia, or Latin America, understanding how to exchange money abroad can help you avoid unnecessary fees and make your travel budget go further.

In this guide, we’ll walk through the best practices for exchanging currency while traveling, including where to go, what to avoid, and how to get the most value for your money.

Why Exchange Currency Before You Travel?
While it’s possible to exchange currency abroad, having some local cash on hand upon arrival is always a smart idea. It can help cover:
- Transportation from the airport
- Tipping at restaurants or hotels
- Emergencies in case of card issues

Ordering currency from your bank before departure ensures you start your trip with cash and helps you lock in better exchange rates than you’ll find at airport kiosks.

Best Ways to Exchange Currency While Traveling

1. Use ATMs in Your Destination Country
One of the easiest and most cost-effective ways to get local currency is by using an ATM abroad. Banks usually offer better exchange rates than currency kiosks.

Tips:
- Use ATMs located at reputable banks—not in convenience stores or sketchy areas.
- Withdraw larger amounts to minimize per-transaction fees.
- Notify your bank ahead of time so they don’t block foreign transactions.

2. Use a Debit Card with No Foreign Transaction Fees
Look for debit cards that don’t charge international ATM fees or foreign conversion fees. Popular travel-friendly banks include:
- Charles Schwab High Yield Investor Checking
- Capital One 360 Checking
- Fidelity Cash Management Account

3. Avoid Airport Currency Exchange Booths
While convenient, airport kiosks typically have some of the worst exchange rates and high service fees. Avoid these unless you’re in an emergency.

4. Exchange Currency at Local Banks
In many countries, exchanging currency at a local bank is safer and cheaper than using street vendors or tourist traps. Just bring your passport for ID.

5. Use Currency Exchange Apps or Prepaid Travel Cards
Apps like Revolut, Wise (formerly TransferWise), and Monzo allow you to convert currency in real time at interbank exchange rates with minimal fees.

Benefits:
- Lock in real-time rates
- Track spending in local and home currencies
- Easy access via smartphone

6. Bring U.S. Dollars as Backup
In some countries, especially in Southeast Asia or Latin America, U.S. dollars are widely accepted or easily exchanged at a favorable rate. Keep some on hand in small denominations.

What to Avoid When Exchanging Currency

1. Dynamic Currency Conversion (DCC)
If a merchant offers to charge your credit card in your home currency rather than the local one, decline. This “convenience” comes with inflated exchange rates.

2. Exchanging Money at Hotels or Tour Desks
Hotels often add hidden markups. You're better off using a bank or trusted ATM.

3. Exchanging Too Much at Once
You might be tempted to convert a large sum upfront, but this can backfire if the local currency depreciates—or if you don’t spend it all and need to convert back.

4. Not Understanding the Mid-Market Rate
The mid-market rate is the true exchange rate between two currencies. Use tools like XE.com or Google’s currency converter to know what rate you should be getting.

Pro Tips for Managing Currency Abroad

• Always carry some small local bills and coins for tips, taxis, and vendors.
• Keep larger amounts of money locked away in your hotel or travel wallet.
• Store receipts from exchanges in case you need to convert back at the end of your trip.
• Use apps like XE, Revolut, or Wise to monitor exchange rates in real time.
• Avoid mixing currencies—keep separate envelopes for each one if visiting multiple countries.

Credit Cards vs Cash Abroad
Credit cards are widely accepted in most developed countries—but not in rural areas, street markets, or small vendors. Use cards for:
- Hotels
- Restaurants
- Big ticket purchases

Use cash for:
- Public transport
- Markets
- Local attractions
- Tipping

Always carry both.

What to Do with Leftover Currency
• Exchange it back at a bank before returning home (some won’t accept coins)
• Use it at the airport for food or souvenirs
• Save it for your next trip
• Donate it to charity at designated airport drop boxes

Safety Tips When Handling Foreign Currency
- Don’t flash large amounts of cash in public
- Use a money belt or hidden pouch in high-theft areas
- Store emergency backup currency in a separate location from your wallet
- Count bills immediately after exchange—before leaving the counter

Final Thoughts
Knowing how to exchange currency while traveling abroad can save you money, reduce stress, and ensure you’re never caught without cash in a critical moment.

The key is preparation: research your destination, notify your bank, carry the right cards, and avoid high-fee exchange options like airport kiosks or hotel counters.

With a little planning, you’ll have more to spend on the experiences that matter most—while keeping your finances safe and secure every step of the way.