Where to Exchange Currency Without Getting Fleeced

As a former professional basketball player who had to buy things in Israel, the Czech Republic, Bulgaria, Russia, and Germany, I became quite familiar with how hard it can be to find a good deal when exchanging currency. I’m pretty sure I’d be retired right now if I hadn’t been taken for a ride in so many airports exchanging my Shekels for Euros. But when you’re young and dumb, using the high-priced airport exchange kiosks seems like the best option.

What’s the Best Way to Exchange Currency?

Over time, I learned that there are much better ways to exchange money than to simply land in a new country and hope for the best. If you’re wondering how and where to exchange currency without paying through the nose, here’s how to do it.

Know What You Should Be Paying

Exchanging money is a financial service, which means it’s usually going to cost you at least something, even if it’s just a few cents. But you should know how much you’re being charged for the convenience. Before you exchange money, check the business news or a currency website such as XE.com to find today’s actual exchange rate. The rate you pay when exchanging cash in person will almost always be higher — but now at least you have a baseline to compare it to, and you’ll know whether you’re getting ripped off or not.

For example, Travelex, the ubiquitous money exchange kiosk found in many international airports, was advertising sell rates on euros and British pounds that were about 9% higher than what we found on XE.com at the time of publication. That’s a pretty steep surcharge.

Use a Credit Card

For a long time, I was so in fear of going into credit card debt that I didn’t want to own a credit card, no matter how much money it would save me while traveling. My intentions were noble, but this strategy cost me in the long run.

Many credit cards — especially the best travel credit cards — allow you to pay for things all over the world in local currency without paying a dime in transaction or exchange fees. They also offer benefits like fraud protection. Find a travel card you like, and take advantage of it. 

Using a credit card for most transactions means you’ll still earn rewards points and won’t have to carry around wads of cash, reducing the impact of theft. It’s simpler to get a new bank card than to try to chase down the pickpocket who just got the best of you on the subway — and also way less dangerous.

See What Your Local Bank Offers

If you’re wondering where to exchange currency in person, start before your trip at your local bank. Not only does dealing with your hometown bank ensure there’s no language barrier, but they can also offer better deals to their customers because, as a financial institution, they have access to the best rates. 

This takes a little planning ahead — it won’t help you after touching down at Heathrow, obviously — but it’s definitely worth it. It’s not uncommon to pay 10% to 26% above the normal exchange rate when using a typical airport exchange kiosk due to their exorbitant fees. Avoid Travelex like the plague. 

Use a Foreign ATM

While many banks will charge you a fee of $3 to $5 for using any out-of-network ATM, plus a 1% to 3% foreign transaction fee for an international withdrawal, taking out money from a local ATM once you arrive at your destination is still probably the best way to exchange currency abroad.

To minimize the impact of those ATM fees, take out as much cash at once as you’re comfortable walking around with — and keep it in a money belt for added security. And if you’ll be traveling extensively, consider opening a checking account with a global bank such as Citibank, which has in-network ATMs all over the world, or a bank like Capital One, which doesn’t charge for out-of-network withdrawals.

Avoid These Money-Exchange Mistakes

Here are some common ways people end up paying too much for currency exchange services — avoid them if you can.

Traveler’s Checks Aren’t a Great Option…

Much like snail mail and the Polaroid camera, traveler’s checks are not faring too well post-digital revolution. There are simply much more efficient options. Buying traveler’s checks will mean high transaction fees and poor exchange rates. They’re also not nearly as secure as a credit card, diminishing what was once their main selling point.  

…and Neither Is Ordering Cash Online

While you probably won’t get fleeced as bad as you will with traveler’s checks, ordering cash online is still inefficient. The rates won’t be as good as at your local bank or a foreign ATM, and there are also fees associated with delivering you the money. To test out this method, I placed a hypothetical order from Travelex.com and I was charged 9% more than the current exchange rate. 

Prepaid Travel Debit Cards Aren’t Ideal, Either

If you don’t have the credit score needed to qualify for a traditional credit card, you may be tempted to use a prepaid travel debit card. But they’re really not a great option.

Simply put, these cards offer less protection than credit cards and carry higher fees. In going through the hypothetical process of signing up for a prepaid MasterCard for international travel, I learned that there are ATM fees, foreign transaction fees, fees to see your statement, and delivery fees. There’s even a monthly (not yearly!) maintenance fee.

Still, for those who can’t qualify for a traditional credit card, a good prepaid debit card can be a decent, if pricier than necessary, alternative to traveling with wads of cash and exchanging it at the airport.  

Don’t Forget to Inform Your Bank That You’re Traveling

Before you leave for any international trip, make sure you notify your bank and credit card issuers that you’ll be traveling and where to. Otherwise, they might freeze your account (fearing fraud) once they see an international withdrawal or transaction. 

If your card is frozen because your bank thinks it’s stolen, that can be a big hassle. It can take hours or days to clear up such a mistake across time zones, in which time you’ll be missing out on your vacation and potentially unable to access your money. Let them know ahead of time where you plan to be, and it will save you a lot of trouble.

Traveling With Only U.S. Dollars Will Cost You

Many Americans think the world revolves around the United States, but unless you only plan on buying trinkets off the street at a tremendous markup, don’t expect to rely exclusively on U.S. dollars abroad. Any respectable business will charge you a hefty fee for doing so, or worse, they won’t accept them at all. However, a $100 bill tucked away somewhere safe makes a good travel emergency fund, because you’ll at least be able to exchange it somewhere in a pinch.

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Drew Housman


Drew is a former professional basketball player and a Harvard graduate. He is passionate about writing content that empowers people to improve their careers, save more money, and achieve financial independence. His writing has been featured on MarketWatch, Business Insider, and ESPN.