How to Get the Best Foreign Exchange Rates

hong-kong-money.jpgafrican-money.jpghong-kong-money.jpgmoneyEvery seasoned traveler knows it’s important to have cash on hand when you travel. In most cases, it starts the minute you land—you’ll need the right currency for cab fare from the airport, and tips at the hotel. So, where can you find the best foreign exchange rates, and just as important…how do you access that rate? It all comes down to weighing both convenience and cost.

More and more credit cards are eliminating foreign transaction fees, which could mean serious savings. You can also skip the high foreign exchange commission rates by pulling money out of a foreign ATM, but you might run into the issue of additional fees.

So…here are your options for changing money on the road, as well as who has the highest and lowest rates.

Airports & Hotels

Most airports and train stations conveniently have currency exchange desks where you can convert cash. But this is the least advisable method for switching money, since they often charge high commission and transaction fees. The few desks that don’t charge commission fees usually have less desirable exchange rates.

Whatever you do, don’t exchange your dollars for foreign currency here in the U.S. Most banks usually don’t carry all foreign currencies, and even if they do, it’s usually in very small amounts. Worse, they charge an unfavorable exchange rate. Our advice—wait to convert your cash until you arrive.

Again, foreign exchange booths at airports charge high commission rates and don’t often offer the best rate of exchange. Instead, opt for an ATM to get a small amount of cash—enough to get you into town.

Once there, head for a local bank. They offer the most current (and fair) exchange rate, and don’t often charge a commission. Or, if your ATM doesn’t charge you for using an outside ATM from another bank, then do all your money changing through that machine.

Hotels are a bad idea for changing money because of steep transaction fees and poor exchange rates.

Travelers checks? Not advisable. Keep in mind what a travelers check is—you are loaning the issuer a lot of money with no interest. That may be one reason these companies give you the checks in a handy “waller.” Their hope is that you won’t use all the checks and will keep them in your dresser drawer.

So, it’s back to the ATM, and now…the details:


To make sure you have the right currency on hand, you can also extract money from an ATM. Some foreign banks can offer some of the best exchange rates. Some banks do not charge fees if customers use specific ATMs while abroad, yet other banks charge fees for any ATM use. Check with your bank in the U.S. for the names of their partner banks abroad.

In addition to fees, banks may also charge a percentage of the withdrawal as foreign exchange costs. In that case, it’s better to extract larger sums of money for each withdrawal, instead of paying excessive fees for multiple withdrawals.

Credit Cards Without Foreign Transaction Fees

One of the best options for travelers is to carry a credit card that has no foreign transaction fees. These have fair exchange rates and no conversion fees, and make it much easier to charge larger amounts while you’re traveling.

Regular credit cards are another option, but credit card companies generally charge as much as three percent for every foreign transaction. Either way, make sure to notify your credit card company in advance that you’ll be making charges outside the country. If several foreign charges suddenly pop up, the company could freeze your card until they verify the card hasn’t been stolen.

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By Justin Shamtoob for