A Penny for your Thoughts: Tips for Getting the Best Currency Exchange

Last week. I wrote about My Simple Currency Exchange Rate Philosophy and helping my nervous friend find a more relaxed approach to spending money when he travels. Reader Danny wrote: “I think it might be an interesting topic for how people get better rates for getting currency exchanged similar to your Disneyland best practices (read The Ultimate Disneyland Playbook (Full of TWG Reader Tips!)). I always do the ATM, but I’d be curious to see if there are any other good ways.” Danny had a good idea, and indeed many of you replied with your ideas about getting the best exchange rate possible. I still think this topic is worth fleshing out a bit more, so let’s begin.

Image source: http://www.sfgate.com/business/article/A-brief-history-of-money-11059182.php

I’ll go first, as I’ve had many varied experiences over the years, and I think some of it has to do with the varied locations of my travels. For instance, when I was in Bali, cash was king. My lodgings did take credit cards, but otherwise, the local merchants wanted cash. The owner of the small family-run place I stayed at didn’t want me going to any money changer, bank, or ATM on my own. I was traveling alone and he was the personal friend of friends of mine, so he felt very protective of me. He took me for a twenty minute ride on the back of his scooter into Ubud where he escorted me to his money changer and handled the transaction for me. Later, when talking to other travelers, I learned that I got a really good exchange rate, but of course, a scenario like this is POSSIBLE, but not the norm.

I do feel that asking the locals, or even the concierge at my hotel, has lead me to the best places for exchanging US Dollars into the local currency. In Buenos Aires, through an introduction some friends made for me to people who spend six months of the year in Argentina, a good money exchange offer came my way.  These “snowbirds” have bank accounts in Buenos Aires. If I brought $100 bills (which their bank preferred), they offered to get cash from their bank for me. I liked this idea and said yes, thank you! The exchange rate was good and if I had any Argentine pesos left at the end of my stay, they offered to buy them back from me. Good deal for me, and nice people, for sure. So these are two examples of having local help when exchanging money.

Even though we miles/points folks use cash as rarely as we can, whether home or on our travels, we do need to have some cash on hand. Sometimes there is a fee tacked on to certain services or items and it’s just a better deal, even figuring the loss of miles/points to use cash. As many of you mentioned in the previous post, use your Charles Schwab Visa Debit Card at ATMs and your ATM fees will be reimbursed. This is the most popular and convenient way to get cash. I will say that I’m picky about which machines I use in terms of their locations. I look for an ATM that has some privacy and notice which machines the locals use.

Charles Schwab Visa Debit Card

I’ve had two issues with ATMs. The one that got me seriously considering which ATM to use happened 6 years ago near the Vatican. I won’t go into detail in this post, but the ATM was using a skimmer, so picture me yelling, “Get away from me” at the top of my lungs at this guy who came up to “help” me, it was quite a scene (read PSA: Use ATMs with NFC Readers to Avoid ATM Skimmers). So do be aware and cautious about the ATM choices you make. An ounce of prevention can save your lung power :)

I have done one thing that I believe is smart, which nobody mentioned in the comments on the last blog post, so let me share that here. I opened a Charles Schwab checking account that I use just for money when I travel. This way, I can keep just enough cash for me to access when I’m on the road, I can move more money in if I need to, and if anything happens to that debit card, it’s not linked to any of my other bank accounts. Maybe you’ve done this too.

If you have a private client type of relationship with your bank, I think it’s a good idea to check with them about exchange rates. It certainly can’t hurt to ask, and as some of you mentioned, you’ve often been told you’ll get a better exchange rate when traveling overseas. Another currency exchange rate idea, and something I’ve had to do a few times, was to get cash from the hotel where I was staying. Now before you jump to the comments section and blast me on this, hear me out. Firstly, I’ve only done this a few times. I’ve done it in special needs situations only, and though a small fee was tacked on, because the cost was added on to my hotel bill, I did at least get points for it. It’s good to know that even though this is not even close to the top of the list of getting the BEST exchange rate, some hotels will do this and it’s possible. I’ve been very appreciative of the variety of things that hotels have let me add to my bills and the miles/points I’ve gained!

I usually don’t concern myself with having cash leftover at the end of trips. I like to have a stash of some currencies, like Euros, for my next trip. If it’s a currency I don’t think I’ll need again anytime soon, a few days before I depart from that location, I’ll notice how much cash I have left and start to use it. That works for me. It’s also fun to show people who don’t travel much, or for people who would like to travel more, what foreign currency looks like. And for some of us who have Italian lira or other currencies no longer in use, they make for fun show-and-tell stories.

So that’s what’s on my mind today about exchange rates and currencies. Please add what you’ve done, and let me know what creative strategies I’ve missed out on. Any questions, let me know in the comments below. Thanks everyone!

36 thoughts on “A Penny for your Thoughts: Tips for Getting the Best Currency Exchange

  1. DaninMCI

    I agree with keeping currency of places you’ll go again or even places you’ll transit. For example I have a small stash of Euros and Pounds that are great to have when you hit the ground on your next trip. These are also valuable even when just transiting. For example I’ve transited LHR and CDG this year and used a few Pounds/Euros which was convenient. We try to use up most other currency before we leave those countries and anything left over goes in a big clear glass jar in our kitchen as souvenirs. It has everything from HKG dollars to Israeli Shekels.
    We usually use ATMs but I try to only use them at an actual legit bank if possible. I also have a separate account that I use for most of this that is a BofA account. I research what international bank partners they have that don’t charge as much on the fee’s also.

    1. shelli

      Good ideas, Dan. When I hit the ground I’m often tired, so I too like having some local currency already on hand. Good to know BofA customers have that option available to them. Your idea of a glass jar is great. I often use foreign coins as ball markers on the golf course! Thanks for stopping by.

  2. AJ

    I usually keep a small stash of cash for countries I frequent. Yes and yes to the Charles Schwab investor checking. This has saved me a ton of cash.

    I used to live in Japan for work (just got back). I worked for the US and was paid monthly for my housing expenses at the set yen/usd exchange rate, which is terrible. Since I had to pay my rent in yen, I went to the local JP Bank ATM twice (total pain) but pulled out the yen to pay my rent and bills. Paid them in cash in person. Overall, I saved a few thousand dollars doing this. For example, I was paid for my rent at the US rate of let’s say 103 yen/usd and was able to get the bank to bank rate usually at least 3 points better through the Charles Schwab ATM. It really added up over the year.

    1. shelli

      Very creative idea, AJ. Saving a few thousand dollars is a lot of sushi! Thanks for taking the time to comment.

    1. shelli

      They are certainly up there on the list, Pat. They are probably the most common exchange source. Always good to have other choices, and we’re getting some great ideas today.

  3. Dan @ Points With a Crew

    My bank reimburses ATM Fees but does not reimburse the fees that the ATM owner charges. It’s hard for me to notice those because they aren’t separated from the money.

    We were in Peru and withdrew 400 Soles from an ATM. It just charged as one charge of ~$120 on my bank account. I was not charged a fee by my ATM

    Any suggestions on this?

    1. shelli

      Interesting question. I’m wondering what bank you use. Was this ATM at a bank? Did you notice the comment by DaninMCI where he researches BofA international partners who charge less fees?

      1. Dan @ Points With a Crew

        I use PNC bank and I’m not sure what bank the ATM I used was (it was inside our hotel)

  4. Ricardo

    The Aspiration checking account is better than Schwab’s – besides reimbursement of ATM fees everywhere it has an above-average interest rate – currently 1%.

  5. Lee @ BaldThoughts

    I do the same with keeping currency. I know that I’ll continue to travel and explore, so the currency will be used at some point in the future. And I never have too much cash in local currency, so it’s not worth exchanging it.

    1. shelli

      This seems like the same relaxed view most of us take. Something about having foreign currency keeps us motivated to keep traveling and exploring. Thanks, Lee.

  6. Ryan

    1) Use State Farm Bank…it’s purely online banking (no brick and mortar), but they reimburse all fees and don’t charge any fees themselves. When taking money out, their exchange rate is spot on. Using XE currency exchange as a comparison, it is almost identical to that (give or take 10 cents).
    2) I live in DFW and last time I was going through there I happened to notice an ATM near the currency exchange kiosk in Term D that gave out not just US $ but also other foreign currency. I saw euros and pounds for sure, maybe pesos and HK dollars. Anyway…never seen that before, so that is an option to prevent you from having to get local currency when you land (not sure on fees, assuming there are your normal ATM fees).
    3) Check your local bank branch…they may allow you buy currency and the rate is usually much better than money exchange kiosks. Wells Fargo is one that I know that some branches in larger cities will keep certain currencies on hand that you can just walk in and debit your personal account and in turn, get the foreign currency withdrawn.

    #1 is my go to, I never have issues and I never have to worry about getting a bad deal. And I also bring back currency, it’s nice having a stash of it, even if I’m probably never going back to that country (usually never more than $20 worth).

    1. shelli

      Excellent tips, Ryan. Thank you. I’ve never heard of State Farm Bank so will look at them and see what they offer. Good news about DFW as many of us transit there.

    2. askmrlee

      #2, will never get you as good of an exchange rate as using a local ATM in your destination country.
      Those Travelex, off site currency exchanges have THE WORST rates. There’s even one in my local mall and I cannot understand anyone who would willingly use it.

      #3, Yes at least using a retail bank will get you a better rate than #2, but still doesn’t beat the local ATM, assuming you don’t have an account at the majors that don’t reimburse ATM fees and charge ATM fees of their own.

  7. askmrlee

    In my life I’ve used a hotel to get currency twice. Once was when I exchanged travelers cheques (remember those?) and ATMs were not as well connected as they are today.

    Second was more recent. I went to India on the first week of demonetization last year, so I had little choice but to get some cash from my hotel. The second hotel I stayed at wasn’t even doing forex because they had a limited supply of cash themselves.

    But unless you are going to some super remote part of the world, do some research and find out if there are ATMs at your arriving airport (there should be) and find out which bank ATMs you can access for free. Better yet, get an bank account that both reimburses the ATM fees and does not charge a foreign transaction and/or foreign currency conversion fee (these fees are different, it’s important to distinguish). You may find a local credit union offers this, so you don’t have to use an online only bank.

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  9. Steve

    I’ve traveled to dozens of countries, relying on ATMs but have had a few issues that make me think the ideal situation would be to arrive with a bit of cash:
    * Arriving to the main train station in Sarajevo, the nearest ATM was about a half mile away
    * In Buenos Aires 6 years ago, there was a nation-wide shortage of paper currency, lots of empty ATMs and long lines at banks
    * Throughout Siberia, my ATM card was blocked several times by my bank (regardless of my travel notifications) — had to find a way to call in to get it unblocked

    1. shelli

      Those situations would make me want to arrive with a bit of cash as well! I had a similar experience when I arrived in Buenos Aires without cash. The ATM’s weren’t working and I had to rely on the kindness of a stranger. Thanks for taking the time to share your thoughts, Steve.

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  11. cleo brown

    Hi Shelli–this post is really helpful to me.
    Here is my followup question
    I have a “private banking relationship” due to my profession—they do not charge fees to me and I could exchange dollars for Euros here today for 1.2619.
    Is that better than an ATM in Paris?
    How would i find that out?
    Id really rather not travel with a bunch of currency…but the fees can add up

    1. Shelli Post author

      Hi Cleo, Here’s what I’d suggest because there is no way to really know about ATM’s until you get there. If you mean your bank is exchanging 1Euro to 1.26 USD, I just checked online and that’s a great rate, especially with no fees. If it were me, I’d take 100 USD in Euros. I’m assuming you’ll mostly use credit cards once you’re there. I don’t like to arrive without a small stash of currency, either. Hope this helps.

  12. Derek dewitt

    I have a few business trips planned this year, so I’ve been looking for ways to get the best currency exchange rate from my bank. I like that you mention how you keep a separate checking account for when you travel. This sounds like a great way to stay organized and keep track of transactions from those trips specifically.

    1. Shelli Post author

      HI Derek, Glad the ideas in this post helped you. I hear ya when you say staying organized and keeping personal and business expenses separate is a challenge. Once you find a system that works, it’s a lot easier. Have a great day and thanks for reading!

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    1. Grant

      In South America, I have had pretty good luck exchanging crisp US Dollars into the local currency at currency exchange “banks”. Where do you typical exchange money?


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