Figuring out how to exchange currency before you travel could save you a good amount in fees. Your local bank or credit union likely has the best exchange rates and lowest fees. If you want to wait until you get abroad, it’s usually more cost-effective to opt for an ATM than an airport exchange kiosk.
Read on to learn about:
- How to exchange currency when you travel
- Why to consider using a no-foreign-transaction-fee credit card
- Tracking your spending while you travel
Here’s how to convert money when traveling:
If you want some foreign currency in your pocket before you arrive at your destination, consider purchasing it from your bank or credit union. Banking institutions typically have decent exchange rates, but you might have to pay a fee for the transaction.
Bank of America, for instance, offered a British pound exchange rate of GBP 0.71 (meaning 69 pence — or 0.69 pounds — per U.S. dollar) on Sep. 15, 2021. According to Google, the market rate that same day was only slightly higher at GBP 0.72, so Bank of America’s exchange rate wasn’t bad.
Note that the bank also charges a flat delivery fee of $7.50 for all foreign currency orders under $1,000. But if you get cash in advance, you won’t have to worry about tracking down an ATM upon arrival.
“One of the best ways to exchange money into foreign currency is by exchanging money at your local bank or credit union before your trip,” says Danielle Desir, founder of travel and personal finance blog The Thought Card. “The only catch is that oftentimes your local bank might not carry foreign currency, so it may take a few days to order the currency. If this is the case, plan ahead.”
Banks aren’t the only places to exchange money. You also can conduct this transaction online through a currency conversion website, such as Travelex or OFX.
Compare your rates to your bank’s to see which one gives you more bang for your buck. As of the time of writing, for example, Travelex offered an exchange rate of GBP 0.74, a more competitive rate than Bank of America’s.
Also keep an eye out for any delivery fees. Note that these fees are usually waived if you order more than a certain amount. Some online currency exchanges also have the option of in-store pickup.
Whatever approach you take, make sure to start the process well in advance of your trip. You don’t want the money to arrive at your home address when you’re already halfway across the ocean.
Accessing an ATM is another cost-effective way to get your hands on local money.
“It will cost you to change your money no matter how you do it, but [one of the best ways] to do it is to withdraw cash from an ATM in your destination country,” says Peter Koch, financial blogger at DollarSanity.
It’s a particularly savvy move if you have a bank with low or no foreign transaction fees. Charles Schwab, for instance, doesn’t charge a foreign transaction fee, and Ally Bank charges a low foreign transaction fee of up to 1%.
Charles Schwab is an especially smart option for frequent travelers, as it has locations around the globe and reimburses you for ATM fees worldwide.
That said, not all banks have such friendly terms. Santander Bank, for instance, charges the following fees:
- $6 for an international ATM cash withdrawal
- 4% of any transaction you make outside the U.S. using your debit card
- 3% of any transaction you make in foreign currency using an ATM card
Plus, some ATM networks charge high fees, which can be hard to predict. You typically will be able to review the fee on-screen before completing your transaction, though, so you can cancel if it’s outrageous.
It’s also a smart idea to take out cash at once, instead of making lots of small withdrawals, to prevent fees from adding up. On the other hand, don’t withdraw too much, as you’ll want to guard against the risks of pickpockets or lost wallets.
Finally, make sure to tell your bank you’ll be out of the country so you don’t get locked out of your account.
When you get to the airport, you’ll likely see one or more exchange kiosks offering a variety of foreign currency. Despite what their signs might advertise, these exchanges typically have the worst rates and the highest fees.
“Definitely avoid airport currency exchange because you’ll likely get an even lower exchange rate,” says Nick Brennan, world traveler and founder of My UK SIM Card. “They know that they have a captive audience who may have left it to the last minute [and] are in a rush (but also excited about their vacation), and so [they] can get away with offering an even lower rate.”
If you plan in advance, you won’t be that worried traveler who’s susceptible to high fees because you didn’t get currency in advance. You also can arm yourself with knowledge by researching current exchange rates before you leave. That way, you’ll have a good sense of what’s a fair rate and what’s not.
Unless you belong to a traveler-friendly bank, chances are you’ll lose money during the exchange from U.S. dollars to another currency. Fortunately, there are lots of travel destinations where you barely have to use cash at all.
“My advice is to forget about exchanging money, other than for a small amount to start you off and have in your wallet,” says Brennan. “In the U.K. and Europe, you can use your debit or credit card for purchasing almost anything.”
You’ll save the most if you use a credit card with no foreign transaction fee, such as the Chase Sapphire Preferred or Capital One Venture card. Some cards also have extra perks for travelers, such as rental car insurance or trip cancellation reimbursement. Terms may apply.
Note that certain credit cards charge an annual fee, so make sure the benefits outweigh the cost. Plus, you have to be careful about staying within budget and not charging more than you can afford to pay off each month. Credit cards come with high interest rates, so carrying a revolving balance from a vacation could end up costing you more in interest than currency exchange fees would.
Although it’s easy to give in to the “treat yourself” mindset while you’re on vacation, be careful not to throw your budget out the window.
Travel often comes with unexpected costs, but there are ways to prepare for the unexpected and save more of your hard-earned money. This guide shares more tips on how to save money when you travel.
Interested in a personal loan?Here are the top personal loan lenders of 2022!
|Lender||APR Range||Loan Amount|
|7.99% – 23.43%1||$5,000 - $100,000|
|4.37% – 35.99%||$1,000 - $50,000|
|7.46% – 35.97%*||$1,000 - $50,000|
|99.00% – 199.00%2||$500 - $4,000|
|5.99% – 24.99%3||$5,000 - $40,000|
|7.99% – 20.88%4||$5,000 - $50,000|
|7.99% – 35.99%5||$2,000 - $36,500|
|10.68% – 35.89%6||$1,000 - $40,000|
|9.95% – 35.99%7||$2,000 - $35,000|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
Fixed rates from 7.99% APR to 23.43% APR APR reflect the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 8/22/22 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
2 Includes AutoPay discount. Important Disclosures for Opploans.
Direct Deposit required for payroll.
Opploans currently operates in these states: . *Approval may take longer if additional verification documents are requested. Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications processed and approved before 7:30 p.m. ET Monday-Friday are typically funded the next business day.
3 Includes AutoPay discount. Important Disclosures for Happy Money.
Happy Money Disclosures
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
Applications submitted on this website may be funded by one of several lenders, including: FinWise Bank, a Utah-chartered bank, Member FDIC; Coastal Community Bank, Member FDIC; Midland States Bank, Member FDIC; and LendingPoint, a licensed lender in certain states. Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 7% may apply depending upon your state of residence. Upon final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. Loans are offered from $2,000 to $36,500, at rates ranging from 7.99% to 35.99% APR, with terms from 24 to 72 months. Minimum loan amounts apply in Georgia, $3,500; Colorado, $3,001; and Hawaii, $1,500. For a well-qualified customer, a $10,000 loan for a period of 48 months with an APR of 24.34% and origination fee of 7% will have a payment of $327.89 per month. (Actual terms and rate depend on credit history, income, and other factors.) The $15,575.04 total amount due under the loan terms provided as an example in this disclaimer includes the origination fee financed in addition to the loan amount. Customers may have the option to deduct the origination fee from the disbursed loan amount if desired. If the origination fee is added to the financed amount, interest is charged on the full principal amount. The total amount due is the total amount of the loan you will have paid after you have made all payments as scheduled.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history. The APR ranges from 10.68% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 9.56% and a 5.00% origination fee of $300 for an APR of 13.11%. In this example, you will receive $5,700 and will make 36 monthly payments of $192.37. The total amount repayable will be $6,925.32. Your APR will be determined based on your credit at time of application. The origination fee ranges from 2% to 6% (average is 4.86% as of 7/1/2019 – 9/30/2019). In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,001 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Avant.
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.
**Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33.
Based on the responses from 7,302 customers in a survey of 140,258 newly funded customers, conducted from August 1, 2018 – August 1, 2019, 95.11% of customers stated that they were either extremely satisfied or satisfied with Avant. 4/5 Customers would recommend us. Avant branded credit products are issued by WebBank, member FDIC.
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 7.46%-35.97%. All personal loans have a 1.85% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade’s bank partners. Information on Upgrade’s bank partners can be found at https://www.upgrade.com/bank-partners/ .