Withdrawing Money Abroad: Best Way To Exchange Currency (2023)

Traveling overseas is expensive. Airfare and lodging alone can be costly, without even factoring in the cost of food, entertainment, local transportation, shopping and more.

So you want every dollar to stretch as far as it can. That requires having the right combination of payment tools in your wallet as well as learning how to avoid international fees and get the best foreign exchange rates, all of which WalletHub covers below.

At the end of this guide, you can also read commentary from experts for additional insight and advice on keeping the purse strings tight during your trip.

Best & Worst Ways To Get Foreign Currency

We recommend carrying both a no foreign fee credit card and no foreign fee debit card overseas to ensure you’re getting the best exchange rates and saving the most on international charges.
But when it comes to getting cash in a local currency, you do have many other options. When comparing the various choices, it’s important to account for the following costs:

  • Exchange rates vary depending on how you convert your currency, so a lack of fees doesn’t necessarily make a form of currency exchange a good option.
  • Foreign transaction fees are a fixed percentage — between 1% and 3% — added to the total of any transaction.
  • Foreign ATM fees are a fixed dollar amount — between $2 and $5 — tacked on to every ATM withdrawal.
  • Foreign ATM owner surcharges are charged by the machine’s owner and work the same way as similar fees charged by out-of-network ATMs within the U.S.

To illustrate the the pros and cons for each of your international withdrawal options, we’ve compared the costs associated with various methods of converting $300 into Euros. These examples use exchange rate and fee information obtained from the WalletHub Credit Card Landscape Report and the Currency Exchange Study. Data for the foreign ATM owner surcharge were collected from various sources; amounts reflect estimates only.

MethodCost to Withdraw/Exchange $300Source of CostTips
Debit Card$0–$20.61Foreign Transaction/Exchange Fee:
1.87% (avg.)Foreign ATM Fee:
$2–$5Foreign ATM Owner Surcharge:
$2–$10 (depending on ATM owner)
Get a no foreign fee debit card from a bank with global ATM networks to avoid all three fees.

Some checking accounts waive foreign transaction fees and reimburse foreign ATM fees. However, such accounts usually require a high initial deposit and minimum daily balance.

Bank Currency ExchangeTypically $16.10Foreign Exchange Rate:
4% worse than VISA or MasterCardForeign Exchange Fee:
$3.50
Currency exchange through your bank or credit union can provide a possibly better value than a no foreign fee debit card only if the bank or credit union that issued it does not have global ATM networks at your destination.
Credit Union Currency ExchangeTypically $16.15Foreign Exchange Rate:
3% worse than VISA or MasterCardForeign Exchange Fee:
$6.25
Credit Card$24.50–$40.74

(depending on issuer)

Cash Advance APR:
22.76% (avg.) or
0.0624% DPR x 30 daysCash Advance Fee:
$11.91 (3.97%)–$13.15 (avg.)Foreign Transaction/Exchange Fee:
2.30% (avg.)

Foreign ATM Fee:
$2–$5

Foreign ATM Owner Surcharge:
$2–$10 (depending on ATM owner)

Use a no foreign transaction fee credit card only for purchases, not cash advances.

Never use your credit card — standard or otherwise — to withdraw cash from an ATM

Airport Kiosk
(Travelex)
$24–$43.99

(depending on whether you exchange at the airport or request home delivery)

Foreign Exchange Rate:
8% worse than VISA or MasterCardForeign Transaction/Exchange Fee:
$0UPS Standard Delivery (if exchanging less than $1K; can arrive within two business days):
$9.99

UPS Next-Day Delivery (if exchanging less than $1K):
$19.99

Travelex does not issue small denominations of foreign currencies, so you're limited to converting to round numbers in the destination currency.
Prepaid Travel Card$26–$45

(depending on issuer)

Foreign Exchange Fee:
7% (max.)Foreign Transaction/Exchange Fee:
1%–3%Foreign ATM Fee:
$2–$5

Foreign ATM Owner Surcharge:
$2–$10 (depending on ATM owner)

There are often additional fees associated with a prepaid travel card. For instance, the VISA TravelMoney Card comes with a $3.95 fee for purchasing the card plus a $5.95 monthly fee, among others.

Make sure to read the fee schedule of each prepaid travel card offer and factor these in to the overall costs before purchasing a card.

Traveler's Checks$19.50–$52.50

(depending on issuer and destination country)

Foreign Transaction/Exchange Fee:
4% worse than Visa or MasterCardIssue Fee:
$2 per $100 or
1%–4% of check value
(depending on issuer)Commission Fee (for cashing your traveler's checks abroad):
2%–10%
Only use your traveler's checks to exchange for cash at a local bank in your destination. Do not use it for purchases to avoid getting the worst exchange rates.

Also, store your receipts, purchase agreement, contact numbers for the issuer and a record of your traveler's check serial numbers in a safe place in case you need a refund later.

Finally, sign your traveler's checks immediately to prevent fraud in the event of loss or theft, but do not countersign them until you are ready to use them.

Tips For Avoiding Extra Costs & Tourist Traps

To be a savvy overseas traveler, you need to know which costly pitfalls to avoid. Read the following tips to help you become that smart traveler.

  • Free Is A Fallacy: “Free cash withdrawals abroad” do not exist anywhere, so beware of such advertisements on foreign ATMs. Moneychangers often use the same scheme, offering “no commission fee” currency exchange. These services are free of any fees, but they’re giving you a really bad exchange rate.
  • Refuse Dynamic Currency Conversion: Merchants and ATMs abroad will offer to convert your purchase or withdrawal amount to dollars (or other home currency) under the guise of “convenience” to you. This practice is known as dynamic currency conversion (DCC), which you should refuse every time. Although it is indeed nice to see your transaction total in a familiar currency, DCC tacks an additional charge — up to 7% — onto the amount you would actually pay if you allow VISA or MasterCard to perform the conversion.
  • Ask For A Higher Withdrawal Limit: Ask your bank to temporarily increase your withdrawal limit so you can avoid making multiple trips to the ATM and paying multiple fees if you need to access more cash than is allowed in a single withdrawal transaction.
  • Avoid Cash Advances On Your Credit Card: You should only use your no foreign fee credit card for spending overseas. You should never use it to draw cash advances against your credit limit, which accrues interest immediately upon withdrawal at an average interest rate of 22.76%, according to WalletHub’s Q1 2015 Credit Card Landscape Report.
  • Download A Currency Exchange App: It's a good idea to stay aware of the latest interbank rates (the rates banks pay for foreign currency) to make sure you’re getting the best deal. If you have a smartphone, download a currency exchange app like the one from XE, which publishes the most current rates of the day.
  • Expect The Unexpected: No matter how prepared and cautious you are, emergencies are sometimes inevitable. The best safeguard against unforeseeable expenses is to build a contingency fund into your budget. But if you find yourself in a dire situation without a backup money source, you can contact the U.S. Department of State or nearest U.S. embassy or consulate, which offer emergency financial assistance to U.S. citizens abroad.

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