Where to Exchange Currency at the Best Rates

Where to Exchange Currency at the Best Rates

You can exchange U.S. dollars for foreign currency at a range of outlets both in the country you visit and here at home. It’s wise, however, to get the bulk of your foreign currency at ATMs abroad, which typically offer better exchange rates than any other sources, including your bank in the U.S., online exchanges, and the booths and kiosks in airports and tourist areas.

Still, it’s smart to carry a small amount of the local currency when you first arrive in a new country, to cover immediate costs until you can reach an ATM.

Currency Exchange at Banks

Most major banks will exchange your U.S. dollars for a foreign currency if you have a checking or savings account with the institution. In some cases, a bank will exchange currency if you have a credit card with the bank. Few charge a fee for this service, and the exchange rate that banks offer—which changes with the foreign exchange market—is typically more favorable than other sources in the U.S.

Some banks provide online orders that deduct from your checking or savings account; the foreign currency is then shipped to your home address, sometimes for a fee depending on the size of the order. Others require you to call or stop by a branch to order currency. Common currency requests—such as euros or Canadian dollars—may be fulfilled that same day, while other less-requested currencies could take two to four days to get.

Many banks will also buy back any extra foreign cash you have after you return, albeit usually at less favorable rates than you paid for the currency.

Currency Exchange While Abroad

Foreign ATMs typically offer the most favorable exchange rates overall, despite any fixed fees you may be charged. But it’s still smart to keep the number of ATM withdrawals low by taking out larger amounts of cash while abroad, to reduce the number of fees that you will pay. The following fees are often levied by foreign ATMs:

  • Foreign transaction fee: Covers the cost of converting U.S. dollars into a foreign currency
  • Out-of-network ATM fee: This fee, up to $5, is assessed for using a foreign ATM
  • Foreign-ATM use fee: ATM operators (outside Europe and Mexico) charge this convenience fee
  • Cash advance fee: If you use your credit card for the cash withdrawal, your issuer may charge this fee

Some U.S. banks have worldwide alliances or affiliate banks in other countries that can make it easier for customers to get money abroad from foreign ATMs, often without imposing as many fees. But they still may impose a foreign-exchange fee.

For instance, Bank of America customers can use international ATMs belonging to affiliates such as Barclays United Kingdom and BNP Paribas to avoid out-of-network ATM fees.

Your last resort for converting currency should be exchange counters at airports or kiosks near hotels or in train stations. While they may be convenient to access, these exchanges typically don’t offer the best rates.

Non-Currency Options

You can avoid the hassle of converting currency by using credit cards or special travel prepaid cards, which also may be safer to carry than a wallet full of cash. Additionally, traveler’s checks offer security measures if they are lost or stolen.

Credit cards: Choose a card with no foreign transaction fees, which banks charge when a transaction on the card passes through a foreign bank or is made in another currency. The fee is typically around 3%.

Prepaid cards: Visa offers its Visa TravelMoney Card. The card can make debit purchases and can be used to withdraw money at worldwide ATMs. Funds can be reloaded in person, over the phone or online using cash, bank account funds, or a debit or credit card.

Traveler’s checks: Some banks and American Express offer special checks that can be redeemed for local currency at certain banks, foreign exchange locations and American Express travel services offices. foreign retailers may also accept traveler’s checks instead of the local currency. If lost or stolen, the checks can be refunded so long as you have the serial numbers of the checks. There are no withdrawal fees, but you may be charged exchange fees.