Where to Exchange Currency Without Paying High Fees (2024)

Almost every overseas traveler needs to exchange currency at some point during a trip. If you don’t know the tricks, it can be extremely expensive. Trading currency at the hotel or even a currency kiosk in an airport or elsewhere in the country can be costly due to poor exchange rates and high fees. For that reason, travelers should look to convert their currency before embarking on a trip or know where to go to save on changing money while abroad.

Key Takeaways

  • Because of high currency exchange fees, travelers should consider converting their currency before traveling.
  • Banks, credit unions, online bureaus, and currency converters provide convenient and often inexpensive currency exchange services.
  • Once on foreign soil, the best means to convert currency is to use a foreign automated teller machine (ATM) or identify whether your bank has ATMs or banking affiliates nearby.
  • Many credit and debit card issuers allow users to purchase items overseas using their cards without foreign transaction fees.

Understanding Exchange Fees

Before we dig into how to avoid exchange fees, let's touch on what exchange fees are and exactly why they happen. This context can help you better understand how to avoid exchange fees.

Currency exchange fees play a crucial role in the global financial landscape. These fees are the charges applied by financial institutions or currency exchange services for converting one currency to another. Financial institutions that provide currency exchange services take on the risk of price fluctuations; if they hold one currency and it goes down in value, they theoretically need to be compensated for holding this currency.

Behind the scenes of a currency exchange transaction, there are significant operational costs as well. Banks have to keep up with maintaining the necessary infrastructure and technology. Financial institutions also need to invest in secure and efficient systems to ensure they're using accurate exchange rates. Exchange fees help cover these operational costs.

Last, financial institutions are profit-driven entities. Banks and similar entities are in the business to make money. Offering currency exchange services is one way they generate revenue. While competition in the market helps keep fees competitive, financial institutions still need to generate sufficient income to remain sustainable and one way they do this is by charging fees for certain services.

Exchanging Currency at Home and Overseas

With the context of why fees occur behind us, let's start digging into how to avoid fees. You can begin by finding out what a fair exchange rate is for the country or countries you'll be visiting. Check key currency exchange websites first. The following are some of the best and least expensive places to convert currency:

  • Local banks and credit unions usually offer the best rates.
  • Major banks, such as Chase or Bank of America, often offer the added benefit of having ATMs overseas.
  • Online peer-to-peer foreign currency exchanges
  • Online bureaus or currency converters, such as Travelex, provide convenient foreign exchange services.

Ordering cash online will likely include delivery charges, and the exchange rate won’t be as good as with your bank; however, this is still a better option when compared with the must-avoid options below.

The best option for exchanging currency and saving fees is to use a foreign ATM or your own bank's ATMs overseas, if possible.

Piggybacking on the suggestion above, if you don’t have time to get the foreign currency before leaving or don’t want to carry a lot of cash, check to see if your bank has ATMs in the destination country or its cities. It may even have banking affiliates there. A key tip is to use an ATM within the airport as soon as you arrive.

When you’re back in the U.S., head to your bank or credit union to transfer any leftover foreign currency to U.S. dollars. It's important to note that some banks will not take foreign currency. As a last resort, if you have foreign currency left over before you depart the country you're visiting, look to convert it at an airport kiosk or a store before leaving.

Using Credit vs. Cash for Foreign Transactions

The world has become so digital that most people no longer walk around foreign countries with traveler's checks and money belts. That’s why you should take both a no-foreign-fee debit card and a no-foreign-transaction-fee credit card with you. The likes of Chase, Bank of America, Capital One, and other major credit card issuers offer specific no-foreign-transaction-fee cards.

It is best to primarily use a no-transaction-fee credit card, rather than cash, on an overseas trip as it will likely offer fraud protection; use currency only as a backup. You can replace lost or stolen credit cards, but lost cash can never be replaced.

However, don’t use your credit card for a cash advance to receive foreign currency. Doing so means you’ll get hit with a cash advance fee and a high interest rate that starts accruing immediately.

The widespread use and enhancement of technology have helped make using credit and debit cards possible in most parts of the world. However, there are exceptions, so it is worth investigating whether your destination accepts debit or specific cards before you go on a trip.

Other Travel Tips

One thing to do before traveling abroad is to let your bank and credit card companies know of your travel plans, although some banks are moving away encouraging from this practice. That way, if you use your credit or debit card abroad, these companies won’t cut off access to your account due to concerns of fraud.

Also, avoid paying in U.S. dollars while outside the country when possible, even if a merchant offers to convert them for you. This includes paying with a credit or debit card. The merchant would likely convert at a rate that’s disadvantageous to you and charge fees. The same goes for paying with U.S. dollars in the form of cash.

Worst Places to Exchange Currency

Some places that you should avoid for exchanging currency are:

  1. Airport kiosks and stores when heading to a country (not to be confused with airport ATMs): Plan ahead, as airport kiosks generally charge some of the highest fees and have the worst exchange rates. When returning to the U.S. with foreign currency to trade in, however, this sometimes might be the only option.
  2. Traveler’s checks and prepaid debit cards: These are not efficient and often carry various transaction fees. They add little benefit, in terms of security, when compared with cash. Prepaid debit cards also come with card fees, foreign transaction costs, and ATM-use charges.
  3. Hotels and tourist areas: Similar to airports, hotels and tourist-centric areas may provide convenience, but they generally charge higher fees for currency exchange. These locations cater to tourists who may prioritize convenience over cost-effectiveness.
  4. Remote locations: In remote or less frequented destinations, currency exchange options may be limited, and providers may take advantage of the lack of competition by charging higher fees. It may also be more administratively burdensome to replenish and monitor these sites, so entities may charge higher fees in return.

When to Exchange Currency

Throughout this article, we've talked about it's best to optimize your foreign currency exchange before your trip. Avoiding last-minute exchanges and utilizing tools like limit orders or rate alerts in advance of your trip can help secure more favorable rates. Additionally, staying informed about economic events that may impact currency values allows for strategic timing.

There's a few other bits of advice on timing. The currency markets operate 24 hours a day during the business week, but they usually close over the weekends. During these market closures, there is no active trading, and as a result, liquidity tends to be lower. Lower liquidity can lead to wider bid-ask spreads, making it more expensive to execute currency transactions.

In addition, holidays can have a similar impact on currency markets. On public holidays, financial institutions and markets in specific countries may be closed, leading to decreased trading volumes and liquidity. This reduced liquidity can again result in wider spreads and less favorable exchange rates.

Where Can You Exchange Currency?

Banks, credit unions, and online currency exchange bureaus and converters provide convenient and often inexpensive currency exchange services. Also, your own bank's overseas ATM or a foreign bank's are ways to get local currency with a credit card or ATM card once you have arrived. Among the worst options are trading currency at a hotel or a currency kiosk in an airport or elsewhere in the country because these can be costly due to poor exchange rates and high fees.

What Are the Alternatives to Exchanging Currency?

Travelers can rely solely on their credit cards for purchases, if accepted everywhere in a country being visited. It's also still an option to bring traveler's checks, although these mostly have been supplanted by the widespread use of credit cards today. You can also choose to spend U.S. dollars in some instances while overseas, but this practice isn't recommended because the exchange rate given in a foreign country is often disadvantageous to the purchaser.

What Can I Do With Leftover Foreign Currency?

When you’re back home, you can go to your bank or credit union to transfer any leftover foreign currency into your own country's currency. Be aware that some banks will not take all foreign currencies. As a last resort, if you have foreign currency left over before you depart the country you're visiting, look to convert it at an airport kiosk or a store before leaving.

The Bottom Line

If you do a little homework before leaving for your trip by checking exchange rates, you’re likely to save. Remember to stick to ATMs and no-transfer-fee credit card spending, and avoid exchanging money at airport kiosks, hotels, and buying things with U.S. dollars to avoid costly exchange rates and fees.

Where to Exchange Currency Without Paying High Fees (2024)

FAQs

Where to Exchange Currency Without Paying High Fees? ›

Best place to exchange currency: Your bank or credit union

Many banks offer currency exchange to their customers. Though there may be a small fee if you exchange less than a certain amount, your bank or credit union will almost always be the cheapest place to exchange currency.

Where is the cheapest place to exchange currency? ›

Best place to exchange currency: Your bank or credit union

Many banks offer currency exchange to their customers. Though there may be a small fee if you exchange less than a certain amount, your bank or credit union will almost always be the cheapest place to exchange currency.

How can I exchange currency without fees? ›

Where can you exchange currency without paying large fees?
  1. Use airport kiosks prior to leaving the US.
  2. Buy traveler's checks or foreign currency cash from your bank or credit union.
  3. Choose an online exchange bureau.
  4. Buy currency on arrival at your hotel or in popular tourist areas.

What is the cheapest way to exchange cash currency? ›

Banks, credit unions, online bureaus, and currency converters provide convenient and often inexpensive currency exchange services. Once on foreign soil, the best means to convert currency is to use a foreign automated teller machine (ATM) or identify whether your bank has ATMs or banking affiliates nearby.

Where is the best place to exchange large amounts of currency? ›

Definitely, use a currency broker. International payments can be made cheaper and faster than your bank. A bank could charge up to 4% in exchange rates costs, whereas a currency broker will normally be under 0.5% from the mid-market.

Which bank is best for currency exchange? ›

Top Banks That Exchange Foreign Currencies
  • TD Bank: TD Bank offers 55 different currencies. ...
  • Service Federal Credit Union: The number of currencies available for customers at Service Credit Union exceeds 60. ...
  • US Bank: Customers of US Bank can exchange money at a nearby branch.

How much does Bank of America charge for currency exchange? ›

A Bank of America International Transaction Fee of 3% will apply when converting your currency.

What is a good fee for currency exchange? ›

Many, but not all, credit and debit card issuers and ATM networks charge a per-transaction fee on purchases or withdrawals made overseas or when ordering online with a foreign merchant. The fee varies but typically runs between 2% and 3% of the dollar amount of the purchase or withdrawal.

Can I exchange currency at a bank without an account? ›

Even if you don't open a foreign bank account, these bank branches still might be able to exchange currency for you. If they are willing to do so you'll likely have to pay a fee, just as you would in the U.S. if you aren't a banking customer.

Why are currency exchange fees so high? ›

Why is it so expensive? Because banks and credit card companies charge users high fees to help them convert between currencies. Understanding how to reduce the costs associated with using your bank card abroad or transferring money between foreign bank accounts will help you save more of your hard-earned dollars.

Where can I get best exchange rate for US dollars? ›

Which supermarket has the best US dollar exchange rate? Waitrose has the best US dollar rate right now at 1.2309. You'll need to order online to guarantee this rate; it may be lower if you turn up unannounced and buy over the counter.

What is the cheapest way to get euros? ›

What is the cheapest way to get euros in the US? The cheapest way to buy euros in the US is usually online. You'll have a couple of options, depending on what suits your needs: Choose a specialist provider which has multi-currency accounts to support international spending - like Wise or Revolut.

Is it cheaper to exchange currency or use ATM? ›

Typically, it's cheaper to use an ATM to get the currency you need. Currency exchange kiosks often come with relatively high fees for travelers.

What is the maximum currency you can exchange? ›

25,000 though. There's no limit, however, to how much foreign currency you can bring into India. Although, you will have to declare it if the amount exceeds US$5,000 in notes and coins, or US$10,000 in notes, coins, and traveller's cheques².

Is it better to get euros in US or Europe? ›

With time at your disposal, you'll be able to see exactly what the fee and rate is, and how many euros you'll get for your dollars. It's possible of course that you might get a better deal when you land in Europe. It may well be the case that fees are lower and exchange rates better.

Does Wells Fargo do currency exchange? ›

We offer more than 70 currencies available for use in over 100 countries. Note: Our branches no longer have foreign currency cash on-hand available for over-the-counter same-day purchase.

What country has the best exchange rate for US Dollars? ›

Best Places to Visit Where the Dollar Is Strong
  • South Africa. South Africa/South African Rand. ...
  • South Korea. South Korea/South Korean Won. ...
  • Japan. Japan/Japanese Yen. ...
  • Argentina. Argentina/Argentine Peso. ...
  • Hungary. Hungary/Hungarian Forint. ...
  • Chile. Chile/Chilean Peso. ...
  • Colombia. Colombia/Colombian Peso. ...
  • Vietnam. Vietnam/Vietnamese Dong.

What country has the lowest exchange rate to the US dollar? ›

The weakest currency in the world is the Iranian rial (IRR). The USD to IRR operational rate of exchange is 371,992, meaning that one U.S. dollar equals 371,922 Iranian rials.

Is it cheaper to buy euros in the US or in Europe? ›

It's often more cost-effective to exchange a small amount of euros in America for initial expenses and then withdraw euros from ATMs in Europe for a better exchange rate and lower fees.

What is the average fee for currency exchange? ›

Many, but not all, credit and debit card issuers and ATM networks charge a per-transaction fee on purchases or withdrawals made overseas or when ordering online with a foreign merchant. The fee varies but typically runs between 2% and 3% of the dollar amount of the purchase or withdrawal.

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