Exchange is one of the few travel costs that is entirely avoidable. The rate you get depends almost completely on where you stand when you ask for it.
The hierarchy of rates
- Best: withdrawing local currency from a bank ATM with a low fee card.
- Good: paying by card in local currency and letting your own bank convert.
- Acceptable: a city exchange office that displays both buy and sell rates clearly.
- Worst: airport kiosks, hotel desks and anywhere advertising zero commission with a wide spread.
Zero commission is not a discount. The profit is in the spread between the buy and sell rate, which is why you should look at both numbers on the board and compare them to the real mid market rate on your phone.
Using ATMs abroad
Choose machines attached to a real bank, decline the offer to be charged in your home currency, and be aware that some independent machines in tourist areas charge a large fixed fee on top of a poor rate. Larger, less frequent withdrawals reduce the impact of fixed fees.
Small notes and change
Ask for a mix of denominations if you can. Large notes are hard to spend at markets, kiosks and on buses, and handing over a big note for a small purchase is a common way to get short changed. Keep coins for toilets, lockers and luggage trolleys.
Cash safety
- Split cash between two places, for example a wallet and a hidden pouch.
- Leave the bulk in your accommodation safe and carry the day's budget.
- Count money discreetly, not in the street with your bag open.
- Keep exchange receipts, which some countries require if you convert back at departure.
Converting back
Spend down local currency before departure, since buying back your own currency incurs a second spread. Coins in particular are usually worthless to exchange offices, so use them on the last day. Airport shops will often take a mixture of cash and card for the final purchase.
If your destination has currency controls or a parallel unofficial rate, read up before you go and stick to legal channels. The apparent saving is not worth the legal risk or the counterfeit notes.
Common questions
- Is it better to exchange money at home or on arrival?
- Usually a bank ATM on arrival beats both, but a small amount changed at home gives you a safe cushion.
- Why did the ATM refuse my card?
- Common reasons are a daily limit, a fraud block, or the machine not accepting your card network. Try another bank's machine and check your app.
- Should I accept the terminal's home currency option?
- No. Always choose the local currency so your own bank sets the rate.
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