10 ways to get the best exchange rate when traveling abroad

The most expensive part of changing money abroad rarely shows up as a line item. It sits inside the exchange rate itself. Retail currency providers price off the mid-market rate. That is the midpoint between the buy and sell prices for a currency on global markets. Providers then add a markup before quoting a rate to a traveler. Some of that markup is labeled as a fee. Much of it is not.

That gap explains why two people on the same trip, spending the same amount, can come home with different bills. One pays by card in the local currency and withdraws cash from a bank ATM. The other changes cash at an airport counter and agrees when a payment terminal offers to charge in their home currency. Neither traveler necessarily sees a single large charge. The difference is spread across many small conversions.

Finding the best exchange rate when traveling abroad depends less on catching a good day in the currency markets than on controlling where and how money gets converted. The choices involved are ordinary. They include which card to carry, which ATM to use and how to answer a prompt on a card reader. They also include whether to buy foreign notes at home or wait until arrival.

The 10 tactics below fall into three broad groups. The first covers hidden markups, including the benchmark rate worth checking before any swap and the conversion offer worth declining at the checkout. The second covers payment tools. These include cards without foreign transaction fees, the network rates set by Visa $V, Mastercard $MA and American Express $AXP, bank-owned ATMs and multi-currency accounts. The third covers cash and timing, from how much currency to order before departure to why trying to time the market is unreliable.

None of these tactics requires special access or a large balance. Most take a few minutes of preparation before a trip, such as reading a card's terms or calling a bank. Card terms and provider fees change over time. For that reason, the slides explain how the costs work rather than quoting specific prices. The list is a practical selection, not an exhaustive one. Each tactic stands on its own, and travelers can use as many as fit their plans.

Illustration: Quartz

The mid-market rate is the standard benchmark for any currency exchange. Look it up before converting money abroad, then compare every quote you receive against it to see how much the provider is charging.

The rate sits halfway between the price at which a currency pair is being bought and the price at which it is being sold on wholesale markets. It is sometimes called the interbank rate or the spot rate. Banks and large institutions trade close to it. Travelers $TRV almost never get it directly.

Retail providers make money by adding a markup to that midpoint. A provider quotes two prices. One is the rate at which it buys a currency from you. The other is the rate at which it sells a currency to you. The gap between those two prices is the spread. A wider spread means a bigger cut for the provider.

That markup is often invisible. A booth or app can advertise no commission and still build its profit into the rate itself. Without a benchmark, a traveler has no way to tell whether a quote is reasonable.

Checking the rate takes seconds. Typing a currency pair such as "USD to EUR" into Google $GOOGL returns a current figure. XE and Reuters also publish mid-market rates, and XE offers a phone app for quick checks. Recording the figure before leaving home gives a reference point for the whole trip.

Direction matters when comparing numbers. A rate can be shown as euros per dollar or as dollars per euro. The two figures are inverses of each other. Make sure the quote and the benchmark are expressed the same way before judging the difference.

To estimate the markup, compare the quoted rate with the mid-market figure for the same currency pair. The gap between them, as a share of the mid-market rate, is roughly what the conversion costs beyond any posted fee. Add any flat fee or commission on top to see the full price.

The benchmark also moves. Currency markets trade around the clock on weekdays. As a result, the mid-market rate shifts throughout the day. A rate noted a week earlier is a rough guide, not an exact target. Checking again on the day of an exchange gives the most accurate comparison.

Illustration: Quartz

When a card terminal or ATM abroad offers to charge you in your home currency, decline and pay in the local currency instead. That offer is called dynamic currency conversion, and its exchange rate is usually less favorable than the rate your card network would apply.

Dynamic currency conversion, often shortened to DCC, appears at the moment of payment. A terminal in a Paris restaurant might show the bill in both euros and U.S. dollars and ask which one to charge. The question sounds like a courtesy, but it is a currency exchange. The merchant or the ATM operator sets its terms, not your bank or card network.

The appeal is certainty. Seeing the total in a familiar currency removes the mental math. The amount on your statement will also match the receipt. That convenience is built into the rate, and the business offering the conversion keeps the margin.

Choosing the local currency sends the conversion to Visa $V, Mastercard $MA or whichever network your card uses. The network then applies its own rate for that day.

The same choice appears at many cash machines abroad. After you enter an amount, the screen may show a converted figure in your home currency and ask you to accept or decline it. Some machines offer options labeled "with conversion" and "without conversion," while others describe their rate as guaranteed. Declining does not change how much cash comes out of the machine. It only changes who converts the amount debited from your account.

Some terminals arrive with the home currency already selected. In other cases, staff make the selection before handing over the device. Visa and Mastercard rules require that the cardholder be given the choice. If a receipt shows a home-currency charge you did not agree to, raise it with the merchant first and then with your card issuer.

Accepting DCC does not necessarily spare you a foreign transaction fee. Some issuers apply that fee to any purchase from a merchant based abroad, whatever currency appears on the bill. The same prompt can also appear when you check out of a hotel or pay on a foreign website. The answer is the same each time: choose the local currency.

Illustration: Quartz

A credit card with no foreign transaction fee removes a surcharge that many cards add to every purchase made abroad. Before a trip, check your card's terms. If it carries the fee, consider bringing a card that does not.

A foreign transaction fee is a charge an issuer applies when a purchase is processed outside the cardholder's home country or in a foreign currency. It sits on top of the exchange rate used to convert the purchase. A card can convert at a fair rate and still cost more than expected because of this added charge.

The fee can come from more than one place. Card networks may charge the issuing bank for cross-border transactions, and many issuers pass that cost on to cardholders. Some issuers add their own charge as well. The cardholder usually sees one combined fee.

How the fee appears varies. Some statements list it as a separate line beside each foreign purchase. Others fold it into the converted amount, which makes it harder to spot. Reviewing a statement after the first few purchases abroad shows how a particular card handles it.

The fee is not limited to time spent overseas. It can also apply when someone at home buys from an online merchant based in another country. A deposit with a foreign hotel or a booking with an overseas airline can trigger it before the traveler leaves.

Fee policies differ from card to card, not only from issuer to issuer. One bank may offer a card with no foreign transaction fee alongside another that charges one. Some cards advertise the absence of the fee as a feature. In the U.S., the fee appears in the pricing table in a card's terms, often called the Schumer box. A call to the issuer can also confirm it.

Debit cards can carry foreign transaction fees too. Anyone planning to use a debit card abroad should check its terms the same way.

A no-fee credit card works for purchases, not for cash. Withdrawing cash with a credit card is usually treated as a cash advance. That typically brings a separate fee, and interest often starts accruing right away. Those costs can outweigh the saving from avoiding the foreign transaction fee.

The fee applies to each foreign purchase. Its cost grows with every meal, taxi ride and museum ticket. Over a long trip, a card without it keeps that running total at zero.

Illustration: Quartz

Paying by card abroad hands the currency conversion to the card network. Visa $V, Mastercard $MA and American Express $AXP each convert at their own network rates, which are generally close to the mid-market rate. That makes a card one of the simpler ways to avoid a retail exchange markup.

When a traveler taps or inserts a card at a shop in Lisbon or Tokyo, the merchant charges the purchase in local currency. The network then converts that amount into the currency of the cardholder's account. That handoff to the network happens only when the merchant charges in the local currency.

The rate used is the one in effect on the day the transaction is processed. That is not always the day of the purchase. A charge can take a day or more to settle. The amount on the statement may therefore differ slightly from what the exchange rate looked like at the till.

Hotels and car rental desks often place a temporary hold on a card first. The final charge is processed later, at the rate in effect then. Refunds go through the same conversion. A returned item can come back at a different rate than the one applied to the original purchase.

Exchanging cash usually means buying currency from a retail provider that builds its margin into the rate. Paying by card skips that step for each purchase. It also means converting only what is actually spent. Cash bought in advance and left over at the end of a trip has to be converted back. The provider's buy-back rate carries its own margin.

Visa and Mastercard each publish a currency conversion tool on their websites. These tools show the network rate for a chosen date. Comparing that figure with the mid-market rate shows how close the network came on a given day.

Visa and Mastercard are accepted at more merchants worldwide than American Express. Travelers $TRV who rely on an Amex card often carry a Visa or Mastercard as well. Some small shops, market stalls and taxis take only cash or local payment apps.

The network rate applies to debit cards on Visa and Mastercard as well as to credit cards. Card issuers may still add their own charges on top of the network conversion. The network rate is one part of the total cost, not the whole of it. Credit cards also come with fraud protections that cash lacks. The terms of that protection vary by issuer and country.

Illustration: Quartz

A debit card withdrawal from an ATM run by a bank is usually one of the cheapest ways to get local currency abroad. The conversion typically happens near the card network's rate, not at a rate the machine's owner sets.

The exchange rate is only part of the cost. Two separate fees can apply to the same withdrawal. The first comes from the traveler's own bank, which may charge for using an out-of-network or foreign ATM. The second comes from the ATM operator, which can add its own access charge on top.

These fees vary from one bank to the next. The fee schedule for a checking account shows what the traveler's own bank charges for a withdrawal abroad. Some banks reimburse ATM fees charged by other operators. Others have arrangements with partner banks in other countries that reduce or remove fees. A call to the bank before departure confirms whether either applies.

Many ATMs display the operator's charge on screen before the withdrawal goes through. That screen is the point to cancel and find another machine if the charge is higher than expected.

Bank-owned machines differ from the standalone ATMs found in convenience stores, tourist streets, bars and transit hubs. Independent operators run many of those machines, and they often set higher access fees than banks do. If any machine offers to convert the withdrawal into the home currency, decline and withdraw in the local currency.

The card used at the ATM also matters. A debit card draws directly from the traveler's checking account. A credit card used at an ATM is generally treated as a cash advance. Cash advances usually carry a separate fee, and interest often starts from the day of the withdrawal rather than after a grace period.

Location adds a security benefit. ATMs inside bank branches or lobbies are generally less exposed to tampering than isolated machines on the street. If a machine keeps a card, bank staff nearby may be able to help retrieve it during opening hours.

Illustration: Quartz

Airport kiosks, hotel front desks and exchange booths in tourist districts are generally among the costliest places to change money. They build in wider margins through a less favorable rate, a commission or both.

The result is less local currency for the same amount of home currency. These counters sell convenience. They sit where a traveler is when the need for cash feels most urgent: at arrivals, at the front desk or on a busy shopping street.

The cost is not always visible. Most counters display two figures for each currency, a "we buy" rate and a "we sell" rate. The gap between them is the counter's spread, and much of its profit sits there. A wide spread means the counter pays little when it buys currency and charges more when it sells.

Signs that promise "no commission" or "zero fees" deserve a closer look. A counter that charges no separate commission can still recover its margin through the rate itself. Others advertise an attractive rate and then add a flat service charge or a minimum fee per transaction. On a small exchange, a flat charge takes up a larger share of the money changed.

To judge any quote, ask for the total amount of local currency after every fee and compare it with what the mid-market rate would produce for the same sum.

Hotel desks follow a similar pattern. Many offer currency exchange as a guest service. The hotel sets its own rate, and the range of currencies on hand may be limited. Asking for the rate and any service charge before handing over cash shows what the exchange will cost.

The same logic applies at the end of a trip. Selling leftover notes back at an airport counter means paying the spread a second time, now in the other direction. Spending remaining cash before departure avoids that second conversion. So does using it to settle part of a final bill or keeping it for a future trip to the same country.

If a counter is the only option at hand, changing only what is needed right away keeps the cost of a poor rate small. A larger exchange can wait until a bank ATM or a lower-cost provider is within reach.

Illustration: Quartz

Taking out cash in a few larger amounts, rather than many small ones, cuts the total you pay in flat ATM fees. When each withdrawal triggers its own fixed charge, the number of visits to the machine drives the cost.

A foreign withdrawal can carry a charge from the traveler's own bank, the ATM operator or both. When a charge is a fixed amount, it costs the same whether the withdrawal is small or large.

That flat structure is what makes frequency expensive. A traveler who visits an ATM every day of a weeklong trip pays those fixed charges seven times. Someone who withdraws enough for the whole week in one or two visits pays them once or twice.

Not every fee works this way. Some banks charge a percentage of the amount withdrawn instead of, or on top of, a flat fee. A percentage charge grows with the size of the withdrawal. Making fewer visits does not reduce that part of the cost. The account's fee schedule shows which type applies, and travelers can check it before departure.

Limits also shape the plan. Card issuers set a daily cap on ATM withdrawals. Individual machines often cap the amount dispensed in a single transaction. A traveler aiming for one large withdrawal may need to ask the bank to raise the daily limit ahead of time. The alternative is splitting the sum into two transactions.

Many ATMs display the operator's fee on screen before the transaction is completed. That screen offers a chance to cancel and find another machine if the charge is higher than expected.

Larger withdrawals mean carrying more cash, which raises the cost of loss or theft. Splitting money between a wallet, a bag and a hotel room safe limits how much can disappear in one incident. Keeping only a day's spending in an easy-to-reach pocket reduces exposure in crowded places.

Overshooting carries its own cost. Converting leftover foreign cash back into the home currency usually means paying another exchange margin. Estimating daily spending before the trip helps set a withdrawal size that covers the stay without leaving a large surplus at the end.

Illustration: Quartz

A multi-currency account from a provider such as Wise or Revolut lets a traveler hold money in several currencies and convert between them at or near the mid-market rate. Each provider sets its own fees. The current terms are worth checking before a trip.

These accounts work differently from an ordinary bank account used abroad. Instead of having each foreign purchase converted at the moment of payment, a traveler can move money from a home-currency balance into euros or Japanese yen ahead of time. The converted balance then sits in the account until it is spent.

This gives the account holder control over when a conversion happens. Someone heading to Europe for two weeks can convert a set amount in one step and know exactly how many euros are available. The app shows the balance in each currency separately.

Both providers pair the account with a debit card. When the card is used in a country whose currency is already held in the account, the payment comes out of that balance directly. When it is not, the provider converts money from another balance under its own pricing rules.

Wise began in 2011 as TransferWise, a service built for sending money across borders. The company adopted its current name in 2021. Revolut launched in 2015 as a travel-focused card and app. It later expanded into a wider range of financial products. Both companies are headquartered in London.

Fee structures at these providers change over time. They can also differ by country of residence, by currency and by account plan. Charges can attach to conversions, to some ATM withdrawals and to certain less common currencies. The provider's own pricing page is the place to confirm what applies to a specific account.

Before a conversion is confirmed, the app displays the rate and any fee. Comparing that rate with the mid-market figure shows how close the exchange comes to the benchmark.

Opening an account takes some lead time. Identity verification is required, and a physical card has to arrive by mail. Applying well before departure helps avoid landing without a working card.

These providers are regulated differently from market to market. Deposit insurance coverage depends on the license a provider holds in the traveler's home country. Reading how customer money is protected clarifies what happens if the provider runs into trouble.

Illustration: Quartz

Ordering a small amount of local currency before departure covers the first few hours abroad, when a card may not work and an ATM may not be in sight. Keep the order modest, and buy it from a bank or credit union rather than a kiosk.

The first stretch of a trip often involves payments that are hard to make by card. A train ticket machine may reject a foreign card. A taxi driver may want cash. A market stall, a bus fare or a tip for a porter can all call for notes and coins in hand. Arriving with some local money removes the pressure to change cash at the first counter in the arrivals hall.

The amount should stay small. Cash bought at home usually carries a wider spread than a card payment or an ATM withdrawal abroad. The goal is to bridge the gap until a cheaper option is within reach, not to fund the whole trip in advance.

The seller matters. Banks and credit unions often sell foreign notes to their customers. Their rates tend to be more competitive than those at currency kiosks in malls or travel hubs. Before placing an order, compare the quoted rate and any service or delivery fee with what a kiosk offers. Some banks sell foreign currency only to account holders. Check eligibility before planning around a particular branch.

Timing needs some planning. Many bank branches do not keep foreign notes on hand. They often need a few days to order them. Placing the request about a week ahead leaves a margin for delays.

Availability varies by currency. Major currencies such as the euro, the British pound and the Japanese yen are widely stocked. Currencies from smaller economies can be harder to order in some places. Travelers $TRV heading to those countries may need to rely on an ATM after landing.

Smaller denominations are easier to spend. Large notes can be difficult to break at a newsstand or a bus kiosk. Small bills work better for exact fares and tips.

Leftover cash is the final consideration. Many banks will buy back foreign notes at the end of a trip, though coins are usually not accepted. The buyback rate adds a second spread on the same money. Ordering only what the first day or two requires keeps that loss small.