In the various travel online discussion groups we participate in, one of the most frequently asked questions is how to best exchange your money into the local currency when you're in a foreign country.
This post is part of our Travel Skills for Travelers Over 50 guide, where we cover the money systems, cards, and tools that help stretch your travel budget.
When we first started traveling internationally years ago, that answer was easy: carry American Express traveler's checks, and exchange them for foreign currency at the American Express office or an established bank wherever you were.
Obviously, that's not how foreign transactions are done today. Whether it's withdrawing foreign currencies from an ATM that takes Visa or Mastercard debit cards, or simply tapping your credit card on the payment machine the restaurant server brings to your table, things are much easier and the foreign transaction fees can be much lower.
How much is at stake when you exchange money the wrong way instead of the right way?
Let's look at US dollars to euros based on the exchange rate today (July 13, 2026). Today, $100 should buy you €87.69 at the wholesale exchange rate. But, if you go to your own bank in the US, you'd be lucky to get €81 for your $100. (The the rate my bank actually offered me today was €81.41.) And you'd probably be paying a fee besides. (Again, my bank would have charged me $10 on top of the lousy exchange rate.)
Let's say you're in Europe for two weeks, staying in hotels, eating in restaurants, and buying a few souvenirs. The difference in the high fees your bank charges you to get euros, British pounds or Swiss francs in advance and the best rates you can get by waiting might add up to hundreds of dollars.
Here are the best ways to get the best exchange rates when you travel.
Rule 1: Pay with a Travel Credit Card (No Foreign Transaction Fees)
The first rule of foreign currency exchange is to pay with a credit card whenever possible. The credit card companies are privy to the best competitive exchange rates. Think of the combined financial clout of Visa or Mastercard when it comes to negotiating fees. Your getting that best rate your credit card company provides assumes, though, that you follow the tips below.
Get a credit card with no foreign exchange fees
The first and best way to get the best rates is to be sure your credit card has no foreign exchange fees. Today, most credit cards that are designed for travel fill this requirement. Chances are, however, if your card was issued by your small local bank or credit union, you may get nicked for around three percent on every foreign transaction. One more tip: be sure your card has tap and pay enabled. That's how the rest of the world works. It's much more secure than swiping the magnetic strip, because the merchant never actually gets your credit card number.
Another thing you should know: Visa and Mastercard are pretty much universally accepted. That's not true with American Express or Discover. Especially, a lot of smaller shops and restaurants will not accept American Express. Be sure you have the right card. (Your Amex card will probably be fine in your hotel and with larger vendors.)
Always choose to pay in the local currency — not dollars
A trick by the foreign banks that's popped up in the last couple of years is, when you tap your card on the payment machine, it asks if you want to pay in U.S. dollars or the home currency. Don't fall for it. Always choose the local currency. For the “convenience” of doing the so-called “dynamic currency conversion” for you, the local service provider will charge you in the vicinity of a 10 percent premium. Let your credit card issuer do the exchange, which they will do when you pay in the local currency.
Read our story on how to choose the best credit card for your travel style.
Use mobile payments where accepted
In addition to tap and pay cards, most foreign vendors will also accept phone payments using Apple Pay or Google Pay. Just like using the card itself, always choose to pay in the local currency when asked. Paying by phone is especially handy on some foreign transport systems, such as Transport for London (the Tube) and Stockholm – to name two we've used recently. London will even cap your spending automatically when you reach the equivalent of a day pass charge. Again, paying with your phone is more secure, because the merchant doesn't get your actual credit card number.
One thing of note, however, is when you're paying at a small local restaurant or shop, for example, if you don't accept the conversion to dollars, the restaurant owner will be eating about a three percent merchant credit card fee that accrues to a US credit card. (The merchant fees on European credit cards is much lower.) You should consider acknowledging that fee by leaving a tip that would cover it. Many US restaurants, you may have noticed, are no longer eating that fee and are adding on three percent to your bill if you're paying by card.
Rule 2: Use a Bank ATM — and Get the Schwab Card
Get a debit card with no foreign exchange fees
Although the vendors in many countries, especially in Europe, have almost gone cashless, there are times when you'll want some cash for tipping or buying something small like a bottle of water or a cup of coffee. That's when you'll hit the ATM. (BTW, tipping in most countries in western Europe is optional. In Spain, which we frequent the most, it's appropriate to round up a €1.80 coffee charge to €2, or perhaps drop €10-15 in cash on top of a €200 restaurant tab.)
Like with credit cards, get a debit card that has no foreign exchange fees. Ask your bank to be sure your card doesn't charge foreign exchange fees. An even better idea is to open an account at Schwab Bank and get their debit card. Their card not only has no foreign exchange fees, they also reimburse you for the ATM fees, which can run from €3-7 in a lot of European countries. And whatever you do, don't use a credit card to get a cash advance. The service fee for using a credit card instead of a debit card will kill you.
We prefer the Schwab debit card, but another alternative if you want a dedicated travel money app, Wise is worth looking at.
The best ATM to use is one connected to a local bank — on the wall outside the bank itself. And it's best to use the ATM when the bank is open in case anything goes wrong – like the machine eats your ATM card. That happened to a friend who was traveling with us in Spain. He had to ask us to accompany him back to the bank and use our Spanish to recover his card. That's a good reason right there to only use a bank ATM.
What to Avoid: Dynamic Currency Conversion, Euronet, and Airport Kiosks
Charge the withdrawal from the ATM in the local currency, not dollars
What is Dynamic Currency Conversion?
Dynamic currency conversion (DCC) is when a foreign merchant or ATM offers to convert your purchase to US dollars on the spot — always at a worse rate than your credit card would charge. Always refuse it and pay in the local currency.
Even with the bank ATM withdrawals, just like with credit cards, if you’re given the option, always choose to have a withdrawal debited in local currencies. Some ATMs will try to get you to engage in dynamic currency conversion and dispense the local currency but debit your bank account in a US dollars. Again, don’t fall for it. Always choose a direct withdrawal in the local currency.
Don't exchange money at the airport
Those airport kiosks are notorious for poor exchange rates and extra fees. If you need a taxi or bus to get into the city, chances are very good, especially in Europe, that the taxi will accept a card or electronic payment. (You can also tip a driver by card by simply rounding up the charge on the meter, which will help him cover the merchant fee.) If you're not able to pay by card – and you actually do need cash – look for an ATM with a bank logo.
Should I use Euronet ATM?
No. Whatever you do, do not use Euronet machines or kiosks either at the airport or on the street. They're the worst places with the worst currency exchange rates. Euronet ATMs and other currency exchange kiosks charge fees that can amount to 10–15 percent of your transaction. Use a bank ATM instead.
Don't exchange money at home
Should I exchange money before going to Europe?
No — wait until you arrive and withdraw from a local bank ATM. You'll get significantly better rates abroad than at any US bank or airport exchange service.
As I said above, the rates you'll get from US financial institutions are probably terrible. The only reason you might exchange currency at your local bank is if you're absolutely sure you'll need a small amount of local currency to get from the airport to wherever you're going. Then, I suppose you could exchange a small amount. Don't, whatever you do, try to calculate all the foreign cash you'll need for your trip and get that. That's just changing more money than you have to at a lousy rate. Get cab fare, if you must, then change more when you get to the foreign bank's ATM.
Get a debit card with no foreign exchange fees
Like with credit cards, get a debit card that has no foreign exchange fees. Ask your bank to be sure your card is good. A better idea is to open an account at Schwab Bank and get their debit card. Their card not only has no foreign exchange fees, they also reimburse you for the ATM fees, which can run from €3-7 in a lot of European countries. And whatever you do, don't use a credit card to get a cash advance. The service fee for using a credit card instead of a debit card will kill you.
Watch out for your debit card's ATM fees
See above. Banks' ATM fees can vary a lot. In fact, you'll often get charged twice: once by the bank you're withdrawing from, and then again by your bank in the US. To beat getting a large string of ATM fees, your best bet is to withdraw all the cash you'll need on one go. One withdrawal equals one fee. Don't withdraw $20 worth every day. If you're worried about carrying a lot of cash, leave most of it in the hotel safe and only carry enough to take care of that day's tipping and coffee needs.
Don't come home with coins
You'll find that most countries don't use bills for smaller denominations any more. For example, the smallest euro note is €5; the smallest British pound note is also £5. If you're planning on reconverting your leftover foreign currency either when you get home or before you leave, you'll find most banks or kiosks won't accept coins.
Donate them in one of the ubiquitous charity bins at the airport. Or, have another cup of coffee.
This post is part of our Travel Skills for Travelers Over 50 guide, where we cover the money systems, cards, and tools that help stretch your travel budget.
Frequently Asked Questions: Getting the Best Exchange Rate When You Travel
Should I exchange money before traveling to Europe?
No — in almost every case, you'll get a significantly better exchange rate abroad than at any US bank or currency exchange service. The rates US financial institutions offer for foreign currency are usually 5–10% worse than what you'll get from a local bank ATM at your destination, and they often add fees on top. The only exception: if you genuinely need a small amount of local currency to pay for a taxi or bus from the airport and can't use a card, exchange just enough at home to cover that. Then find a local bank ATM as soon as you can.
What is the best way to get foreign currency abroad?
The two best options are: (1) paying directly with a travel credit card that has no foreign transaction fees, which gives you the card network's competitive exchange rate at the moment of the transaction, or (2) withdrawing cash from an ATM connected to a local bank — ideally on the exterior wall of the bank, during banking hours, so you have recourse if anything goes wrong. Both methods consistently outperform airport exchange kiosks, hotel currency exchange desks, and US bank pre-trip currency purchases.
What is dynamic currency conversion and should I agree to it?
Dynamic currency conversion (DCC) is when a foreign merchant's payment terminal or ATM offers to convert your purchase from the local currency into US dollars on the spot — essentially doing the currency exchange for you right there. It sounds convenient but it almost always comes at a cost of around 10% above the rate your credit card would have charged. Always refuse it. When a payment terminal asks “Would you like to pay in USD or euros?”, choose euros (or whatever the local currency is). Let your credit card company do the conversion — their rate will be far better.
What ATMs should I avoid when traveling abroad?
Avoid Euronet ATMs and currency exchange kiosks — you'll find them everywhere at European airports and in tourist areas in major cities. They offer among the worst exchange rates available and add significant fees on top. Also avoid using your credit card (rather than debit card) to withdraw cash — credit card cash advances come with high fees and immediate interest charges. And avoid any ATM that offers to convert your withdrawal to US dollars — that's dynamic currency conversion, and you should always refuse it and choose the local currency instead.
Is the Charles Schwab debit card good for international travel?
Yes — the Schwab Bank Investor Checking debit card is widely considered one of the best options for international travel. It has no foreign transaction fees, and uniquely among US bank debit cards, it reimburses all ATM fees charged by foreign banks at the end of each month. Since European ATMs typically charge €3–7 per withdrawal, this reimbursement adds up quickly on a two-week trip. The account requires opening a linked Schwab brokerage account, but there's no minimum balance requirement and no monthly fees. If you travel internationally regularly, it's worth the setup time.
Is it better to use a credit card or cash when traveling abroad?
Credit card for most purchases — it's simpler, more secure, and usually gives you the best exchange rate provided you use a card with no foreign transaction fees. Many countries in Europe have become effectively cashless for most transactions, and you can often go several days without needing cash at all. Keep some local currency on hand for tipping, small purchases (bottles of water, a coffee, a market stall), and the occasional vendor who only accepts cash. €50–€100 in local currency is usually enough to carry at any given time for most European destinations.
Should I use Apple Pay or Google Pay abroad?
Yes — wherever it's accepted. Phone payments are widely accepted in Europe and many other international destinations, including on public transit systems like the London Underground and Stockholm's metro. Using phone payments is more secure than swiping a card (your actual card number is never transmitted to the merchant — a tokenized payment is used instead). The same rule applies: always choose to pay in the local currency if asked, and make sure the underlying card linked to your phone wallet has no foreign transaction fees.
What should I do with leftover foreign coins when I leave?
Donate them. Most banks and currency exchange services won't accept foreign coins — only notes (bills). Since many countries no longer issue notes in small denominations (the smallest euro note is €5; the smallest UK pound note is £5), you'll inevitably accumulate coins. Most major international airports have charity collection bins near the departures area specifically for this purpose. A few euros or pounds in a charity bin beats bringing home a jar of unusable foreign change.
