Foreign Exchange: Get the Best Rate (2024)

Using foreign money wisely requires understanding the going exchange rate with the U. S. dollar and practicing the following strategies to avoid excessive fees.

Take a card that doesn’t charge transaction fees

The primary rule of managing purchases abroad is ensuring you are not using a credit card that charges foreign transaction fees.

“Everything you buy will be 3 percent more expensive if you have a card that doesn’t waive foreign exchange fees,” said Nick Ewen, the director of content at the Points Guy, a travel website that focuses on maximizing credit card benefits.

You don’t need an expensive card with a $500-or-more annual fee to have foreign transaction charges waived. Capital One offers cards with no annual fees or foreign transaction charges. The personal finance website NerdWallet maintains a list of credit cards that don’t charge a fee for foreign transactions.

Credit cards are often safer than cash because fraudulent charges can be disputed. (But given high interest rates, use credit cards only if you regularly pay off the balance in full.)

If you are planning on paying primarily with credit, bring a second card as a backup in case the first is lost, stolen or declined.