This question comes up before every international trip, and the advice has changed dramatically in recent years. The old wisdom was "exchange money at home before you leave." The new reality, thanks to better cards and apps, is almost the opposite for most destinations.
Let me break down all your options with actual costs so you can make the right choice for your trip.
The Short Answer: For most travelers going to major destinations, use ATMs abroad with a no-foreign-fee debit card, and a no-foreign-fee credit card for purchases. Exchange only a small amount ($50-100 equivalent) before departure for immediate needs. Skip the airport exchange entirely.
All Your Options, Compared
| Method | Typical Cost | On $1,000 | Verdict |
|---|---|---|---|
| Airport exchange | 5-15% | $50-150 lost | Avoid |
| Bank pre-order | 2-5% | $20-50 lost | Poor |
| Regular bank ATM abroad | 3-5% + fees | $30-60 lost | OK if necessary |
| No-fee debit card + ATM | 0-1% | $0-10 lost | Excellent |
| Travel card (Wise/Revolut) | 0.3-1% | $3-10 lost | Excellent |
| Credit card purchases | 0-3% | $0-30 lost | Good (with right card) |
Option-by-Option Breakdown
Airport Currency Exchange
Airport exchanges are convenient, which is exactly why they can charge outrageous rates. You're a captive customer — you've already landed, you need local currency, and you don't have time to shop around.
I've seen airport exchanges offer 15% worse than mid-market rate. On $500, that's $75 lost. For the convenience of avoiding a 5-minute ATM transaction, you're paying what could have been a nice dinner.
When it's acceptable: Literally never, if you have alternatives. Even ATMs in the airport terminal are better than the exchange kiosks.
Pre-Ordering Currency from Your Bank
Banks charge markups of 2-5% on pre-ordered foreign currency, plus often a delivery fee or pickup inconvenience. The rates are usually worse than what you'd get abroad because banks build in a safety margin for rate movements.
The main advantage — having cash before you leave — isn't that valuable. Most airports have ATMs right after customs.
When it might make sense: Going to a country with unreliable ATMs or currency controls (Cuba, some African nations). Even then, specialized travel exchanges are often better than bank rates.
Regular ATMs Abroad with Your Bank Card
Using your regular debit card at foreign ATMs typically incurs:
- Foreign transaction fee: 1-3% of the amount
- ATM operator fee: $3-5 per transaction
- Your bank's out-of-network fee: $0-5 per transaction
- Exchange rate markup: 0.5-2%
This adds up fast. A $200 withdrawal might cost $10-15 in various fees. Still better than airport exchange, but far from optimal.
No-Foreign-Fee Debit Card + ATM
This is the current gold standard for getting cash abroad. Cards like Charles Schwab, Fidelity, or certain credit union debit cards:
- No foreign transaction fees
- Rebate ATM fees (Schwab)
- Use Visa/Mastercard's competitive exchange rates
Total cost: nearly zero. You get essentially the mid-market rate with no fees. The only "cost" is opening an account with these providers, which is free.
Pro tip: Withdraw larger amounts ($200-300) less frequently to minimize trips to ATMs and any per-transaction fees from the foreign ATM itself.
Multi-Currency Travel Cards (Wise, Revolut)
Fintech travel cards have revolutionized foreign spending:
- Mid-market or near mid-market exchange rates
- Transparent, small fees (0.3-0.5% typically)
- Works for both ATM withdrawals and card payments
- Lock in rates by pre-converting currencies
- No monthly fees on basic accounts
I've used Wise in over 30 countries. Total fees paid have been minimal, and the convenience of having multiple currencies in one account is unmatched.
Credit Card Purchases
For purchases (not cash), a no-foreign-transaction-fee credit card is hard to beat:
- Close to mid-market rates
- Purchase protection and dispute rights
- Rewards/points on spending
- No fees with the right cards (Capital One, Chase Sapphire, etc.)
Many cards charge 2-3% foreign transaction fees — check yours before traveling. Cards with no foreign fees exist at every level, from basic to premium.
The Dynamic Currency Conversion Trap
Critical: When paying abroad or using ATMs, you'll often be asked: "Would you like to pay in USD/your home currency?" ALWAYS SAY NO. Always pay in local currency.
Dynamic Currency Conversion (DCC) is a scam wrapped in convenience. The merchant or ATM converts for you at a terrible rate (3-8% worse), and both they and their bank profit. You think you're getting certainty, but you're paying a huge premium for it.
The prompt will sometimes be sneaky: "Press 1 to convert to your home currency (recommended)" or showing the USD amount more prominently. Ignore these prompts. Select local currency every time.
My Personal Travel Money System
After years of international travel, here's what I actually use:
- Before departure: Get $50-100 equivalent in local currency from a travel exchange (not the airport). This covers taxi/transport from airport, tips, and emergencies on arrival.
- For cash needs: Wise debit card at ATMs. Withdraw $200-300 at a time from bank-branded ATMs (avoid sketchy standalone machines).
- For purchases: No-foreign-fee credit card for everything possible (hotel, restaurants, shops, transport). Earns points and has protection.
- Backup: Second credit card from a different network (Visa + Mastercard) in case one doesn't work.
Total cost on a typical $3,000 trip spending: under $20 in exchange-related fees. Compare that to $150-300+ if using bank pre-orders and airport exchanges.
Special Situations
Cash-Heavy Countries
Japan, Germany, and some other countries still prefer cash for many transactions. Plan for more ATM withdrawals, but the strategy remains the same — no-fee card + local ATMs.
Countries with Capital Controls
Argentina, Cuba, and some African nations have restrictions that make ATMs less useful or rates artificially controlled. Research the specific country — sometimes the "blue dollar" or informal exchange rate is significantly better, though there are risks.
Remote Destinations
Going somewhere with limited ATM access (rural Africa, remote islands)? Bring more cash, but still source it efficiently — use a good travel card at a major city's ATMs before heading to remote areas.
Frequently Asked Questions
Should I exchange money before my trip?
For most destinations, no — you'll get better rates abroad using ATMs or travel cards. However, consider exchanging a small amount ($50-100 equivalent) for immediate expenses like taxi or tips on arrival. Exceptions: Countries with limited ATM access, capital controls, or unreliable banking systems may warrant pre-trip exchange.
Are airport currency exchanges worth it?
Almost never. Airport exchanges typically charge 5-15% more than the mid-market rate. They're convenient but extremely expensive. Only use them in emergencies. A $500 exchange at the airport could cost you $25-75 more than alternatives.
What's the best way to get cash abroad?
Use an ATM at your destination with a debit card that doesn't charge foreign transaction fees (Charles Schwab, some credit unions, Wise debit). You'll get a rate close to mid-market with minimal fees. Withdraw larger amounts less frequently to minimize per-transaction fees.
Should I pay in local currency or my home currency abroad?
Always choose local currency. When you pay in your home currency, you're using Dynamic Currency Conversion (DCC), which adds a 3-8% markup. Merchants and ATMs often push this option because they profit from it. Say no to "convert to USD/GBP/EUR" prompts.
The Bottom Line
The old model of exchanging at banks before travel is obsolete for most people. Modern travel cards and no-fee debit cards have made ATMs abroad the best option.
Key takeaways:
- Get a no-foreign-fee debit card before your trip
- Use ATMs abroad for cash, not pre-trip exchanges
- Use a no-foreign-fee credit card for purchases
- Never accept Dynamic Currency Conversion
- Avoid airport exchanges like the plague
A few minutes of preparation can save you hundreds of dollars over a trip. It's one of the easiest travel optimizations out there.