Savvy Traveler Tip: How to Maximize Currency Conversions and Minimize Fees

When I travel internationally, I literally never buy foreign currency at home before my trip as I find the exchange rates typically aren't great and I don't want to pay the bank fees. Instead, I wait until I arrive at my destination and withdraw cash from a local ATM. Let me add, these are not the airport ATMs and currency exchange counters, which typically offer poor conversion rates.

While this approach may not feel comfortable for everyone, the truth is that at some point, you’ll likely need local currency while abroad. With a little planning, you can make sure you’re getting the best exchange rates and paying the lowest possible fees. 

The Reality of ATM Fees Abroad

ATMs are the most convenient way to get local currency, but they’re rarely free when you’re outside your home country. Here are the typical charges:

• International Transaction Fee: Often a percentage of the amount withdrawn.
• ATM Usage Fee: A flat charge per withdrawal at foreign ATMs.
• ATM Operator Fee: Extra charge set by the local bank, which varies by location.
• Dynamic Currency Conversion (DCC): many banks now ask if you would like your withdrawal converted to the USD equivalent, which often offers unfavorable exchange rates.

That means a simple withdrawal could cost you much more than expected if you aren’t careful.

Here are my Pro Tips to avoid fees and get the best bank for your buck!

1. Withdraw larger amounts less often.
Paying a flat fee once for a large withdrawal is cheaper than paying those fees on multiple smaller withdrawals.

2. Use partner banks whenever possible.
Check online before traveling to see which banks your home bank partners with and use those ATMs. Some banks belong to international networks that waive or reduce certain fees when you use partner ATMs. These partnerships can save you money by eliminating usage and operator fees. However, most banks still charge a percentage-based foreign transaction fee, so keep that in mind.

3. Know the exchange rates.
Some currencies are easier to calculate in your head than others. To make it simple, I like to come up with a quick ‘mental shortcut’ before I start spending. For example, when I traveled to Vietnam, I remembered that around 25,540 Vietnamese dong equals $1. So if something cost 100,000 dong, I knew it was about four dollars—close enough for everyday decisions.

In Mexico, I use a similar trick: 18.7 pesos equals $1 USD - so I round that up to 20 pesos. That means 200 pesos is roughly $10, and 1,000 pesos is around $50. Again, not exact, but good enough to know if that dinner bill makes sense.

The key is to find an easy fraction or round number that works for the currency you’re dealing with. It doesn’t need to be perfect—just close enough to help you quickly judge prices without constantly reaching for your phone’s calculator.

4. Avoid dynamic currency conversion (DCC).
This one caught me off guard last year. The ATM in Croatia gave me the option to convert the transaction to $USD before dispensing cash in the local currency. That rate was terrible and would have significantly reduced the amount of local currency I received if I had accepted.

My recommendation would be not to accept the "Dynamic Currency Conversion." If the ATM offers to bill you in your home currency (USD) choose "Decline." This can be confusing, but worst case, the transaction is canceled and you start over!

5. Opt for bank-owned ATMs.
This ties in to the first tip, using partner banks. Those money-changing ATMs we often see that aren't tied to a bank probably aren't giving you the best rate. I search the web or ask the locals about popular banks nearby and search out those ATMs.

6. Pay by credit card whenever possible.
Credit cards are known for giving the best possible exchange rates when traveling. Some cards even waive those pesky foreign transaction fees that riddle your credit card statement for purchases abroad. Where you travel may determine how much you can use a credit card versus cash.

7. Carry backup card(s).
Even reliable networks sometimes fail. In China, the ATM ate my debit card and didn't give it back. I always travel with at least one credit card and one debit card. Having options saves stress.

8. Think about your spending.

Be sure to estimate how much cash you'll need so you don't end up taking foreign currency home. You'll lose money when you convert back to $USD. Near the end of a trip, I make loans to friends short on cash, use cash instead of my credit card, and if all else fails, do a little more shopping for souvenirs!

The Bottom Line

Getting cash abroad doesn’t have to be stressful—or expensive. If you plan ahead, use partner ATMs, and make informed choices at the machine, you’ll avoid most unnecessary fees. Cash is still king in many parts of the world, but smart travelers know that the way you get that cash makes all the difference.

#juliyarnalltravel #creatingstandoutadventures

This information is based on my personal experiences and research, and is intended to present new information and ideas. I recommend that each traveler research on their own before making financial decisions.