Safely Exchange Currency When Abroad

Whether you are sightseeing in Paris or setting off to lie on the beach in Mexico, you will most likely need to exchange your local currency for the destination currency. Devise a plan to deal with your money and currency exchange before you go and save valuable vacation time.

There are many ways to exchange currency and currency can even be purchased online!  Here are some ways you can determine a baseline exchange rate and safely exchange currency either before you leave or after you have arrived.

Determine Baseline Exchange Rate
 Exchange rates may differ based on the party from whom you are requesting the exchange.  One way to determine a baseline exchange rate is to search the Internet for currency conversion programs.  This will provide you with a rate based on the midpoint between the buy and sell rate in global currency markets. Knowing this amount beforehand will provide you with knowledge on what you should expect to pay and may help you avoid being ripped off when you actually exchange currency.

Your Exchange Options
You have many options available to you:  airports, hotels, banks, online, prepaid cards, credit cards, and even ATM’s. All methods provide you with either cash exchange or currency conversion on purchase. The key is to understand your options and avoid paying hefty fees in the process. 

  • Hotel/Airport/Exchange Desks – This may be the most convenient method of exchange available to you once you have reached your destination. Although convenient, you will most likely not receive a great exchange rate if you convert currency at the airport, your hotel or an exchange desk.  Airports will charge fees as high as 20% while hotel rates will vary widely based on fees and commissions.  Exchange desks offer slightly better rates than either airports or hotels, but pay attention to ads and offers.  Although claims of 0% commission fees may be tempting, you can expect to pay hidden fees.
  • Bank - Your bank most likely sells foreign currency and cash can be ordered over the phone or online with just a few days notice. Watch out for delivery fees, which will vary although most likely you can have fees waived if you are a longtime customer. Exchange rates for banks may be slightly better than elsewhere as the bank receives wholesale rates which aren’t directly available to you.
  • Online - Purchasing cash online is among the more expensive methods to obtain currency. Although you have the convenience of ordering cash in advance of your trip, delivery fees can be large and eat into the total amount you receive.  Search the internet for exchange websites and be sure to compare providers and fee lists to be sure you are getting the best exchange rate possible.
  • Credit Card – You can use your credit card just as you would at home but be prepared to pay fees of 2-3% for international transactions. This is best reserved for the majority of your large purchases.  There are several credit cards available now that do not charge international fees and the savings can be substantial if you use these to purchase and have numerous transactions.  This option works well for those who don’t like to carry cash or want a written record of their transactions for future reference.
  • Prepaid Card –Prepaid cards can be used just like credit cards, and they are loaded with a set amount of money. The drawback is they are only available in two currencies, Euros and British pounds. Expect to pay fees for withdrawals, inactivity and to have restrictions such as withdrawal minimums and daily limits. A definite advantage is that if the cards are lost, they can usually be replaced by the supplying company although you will pay a fee for this convenience.  This options works well for those who are traveling on a budget or have kids traveling on holiday but don’t want to send large amounts of cash with them.
  • ATM – In most cases you can use your American debit card in an international ATM to withdraw local currency. Check with your bank about its fees policy as many times you will pay between 3-8% for this privilege.  Citibank and Bank of America are among the easiest to do this with as they have an extensive network of international branches and partners that allow you to use your card free of fees.  Avoid using ATM’s out of your banking network as this can lead to outrageous fees. If you do have to pay international fees, minimize your exchange costs by withdrawing larger denominations less often.
  • Roadside – Although this may be convenient and bring an excellent exchange rate, it is not advisable unless you are traveling with a trusted resource.  Most likely you will need brand new bills in large denominations.



US Travel Insurance Association (UStiA)
UStiA is a national association of insurance carriers, third-party administrators, insurance agencies and related businesses involved in the development, administration and marketing of travel insurance and travel assistance products.