Money. When you’re a budget traveler, you make the most of every dollar. You try to avoid needless fees and up-charges at all costs. You try to balance convenience and ease with being cost-effective.
I used to have these questions: “What’s the best and most affordable way to get cash?” And: “Should I exchange currency in the U.S. or get money while I’m overseas? What will give me the best rate?”
Luckily, this 🙋♀️ international traveler (12 countries in Europe and South America over the last two years) has done the legwork for you. I’ve tested and compared the options. Read on for the safest, cheapest, and most convenient way to get local currency while traveling, according to me!
But first, some background. My first overseas trip was at age 19 (can you believe it?), to Poland. My spending money was in the form of travelers checks (now basically defunct, thank GOD) and I still have the distinct memory of exchanging them at the bank. I had to take a taxi to the bank, wait in line, and fill out paperwork – the whole experience was a pain. And a couple days later, I needed cash, AGAIN. This time, I went to an ATM and was retrieving my zlotys in seconds. It was not only faster and more convenient, I got more for my U.S. dollar.
Well, 14 years later, the math still works out!
The best exchange rate and lowest fees: My “do’s”
DO: Get a debit card with no ATM fees to withdraw spending money upon arrival in Europe. Take out just enough cash to pay for those small-ish purchases where cash is easiest. This saves you from withdrawal fees charged by your home bank for using another ATM, which can really add up, especially if you’re in the habit of taking out cash periodically as you need it (also recommended, instead of holding on to hundreds of Euros at one time!).
Fidelity’s Cash Card is a great option, especially if you already have a retirement account through Fidelity. It only took me a week to get my card in the mail and one week for the funds I transferred to be verified. You’ll get the best, “live” exchange rate through the ATM. Case in point: $228.50 = €200 via foreign ATM and fee-less card.
Amount saved: $5 on every withdrawal (compared to an ATM card with a fee)
DO: Bring a Visa or Mastercard with no foreign transaction fees, for “bigger” purchases, like accommodations, restaurant bills, and museum passes. (Save small bills for coffee, bus fare, and tips.) Technology means credit cards are widely accepted, and many travel/airline cards nowadays offer no foreign transaction fees, like American Airlines’ AAdvantage credit card.
Amount saved: 3%, the standard processing charge for foreign transactions – or $3 for every $100 spent
Getting the best currency rates while traveling: My “don’ts”
- Use a standard debit card that charges an ATM fee, usually $3-5 per withdrawal.
- Use a credit card that has foreign transaction fees, usually 2-3% per transaction.
- Bring U.S. cash and exchange at a bank or exchange stall. The rate will be higher and sometimes there’s a change fee.
- Withdraw euros from your U.S. account before you go. While usually there’s no “change fee,” the exchange rate will be higher. Case in point: $245 for €200 at a Wells Fargo bank (of which I am a member) in the U.S.
So, there you have it. Tried-and-true for me, the safest, cheapest, and most convenient way to get local currency while traveling is the foreign ATM. And even if your debit card charges ATM fees, it’s still generally better to use the ATM due to the live exchange rate and the ability to withdraw local currency. (Would you rather pay $245 or $233.50 for the same €200?)
Sure; in this day and age, there are many ways to pay, and convenience comes with an up-charge… but some ways are more cost-effective than others, especially if you’re a budget traveler watching every dollar!
Do you have any other experiences? Let me know your tips and tricks in a comment below.