Currency Exchange

What’s in Your Wallet (when traveling internationally)?

Very bad exchange rates at Travelex

walletThere is no reason to waste your money paying banks and credit card companies to access your own money when traveling internationally. This post includes tips and tricks to avoid fees and some of my recommendations for security and identification.

I don’t carry much in my wallet when I travel, that way there’s less to steal or lose if I do something dumb. I carry a credit card that has no foreign transaction fees, and an ATM card that has no withdrawal fees. And then I take out small amounts of cash, maybe enough for a week. To earn points and to avoid carrying a lot of cash I use my credit card whenever possible. 

Credit Cards

Most credit cards have a 3% foreign transaction fee. This is a waste of money. And if you opt to purchase things with your home currency in a foreign country, you’re just transferring this fee to the company you are buying from as this conversion is almost never free and is never at the current exchange rate.

sapphire_preferred_cardFortunately, lots of credit cards wave this foreign transaction fee. Nerdwallet has a relatively current list of cards with no foreign transaction fees here. If you are going to Europe keep in mind that you want a card that has the chip-and-signature technology. I’m currently traveling with the Chase Sapphire Preferred Card because it also has a good travel reward profile, allowing 1:1 transfer of points to many airline programs, in addition to meeting the above criteria.

ATM Cards

Very bad exchange rates at Travelex

Very bad exchange rates at Travelex

You need cash when you travel, and the only way to get this cash without paying a fee is through an ATM. Banks have to give you the current exchange rate when you withdraw from an ATM.

Traveling with money from your home country (i.e. U.S. dollars) and converting it at the airport or when you arrive is a big waste of money. You will be charged a fee for the conversion and/or will be given a rate that is significantly less favorable than the current exchange rate. Converting money in your home country is really no better. U.S. banks charge a fee, usually hidden in a less than favorable exchange rate, even if you are a member of the bank that is doing the conversion for you.

There are two problems with using most ATM cards in foreign countries:

  1. Foreign transaction fees: some cards charge 1-3%, similar to what many credit cards charge.
  2. Foreign ATM fees: many banks will charge you a fee just for using an ATM that is not your bank’s ATM.  Basically an out-of-network bank charge.

But there are some banks that don’t have these charges, and if you travel internationally you can save a lot of money by using one of them. Here’s an overview of the options from The Points Guy. I use a credit union that is local to my city, and is mostly an online bank. So if you don’t like the big corporate bank options, look into local credit unions. Because they don’t have much physical presence they often will refund your ATM fees and just let you use ATMs anywhere for free.


US-PassportcoverI want to briefly mention ID here because I’ve found that many travelers walk around with their passports. I have visited many countries around the world and almost never needed a passport as an ID outside of the airport. I carry my U.S. drivers license, and on the rare occasion when someone wants to see identification this has always been sufficient.

Of course you should always do a bit of research in advance in case you are going somewhere with strict controls around identification. But even then a copy of your passport is often sufficient. I think this is important because: 1) a passport is big and hard to carry, and 2) you really really don’t want to lose your passport so it’s best if you leave it somewhere safe.


In addition to my primary cards listed above I also pack a back up credit card and backup ATM card, hidden in my luggage (of course I never check these), just in case something goes wrong with my primary cards. I have yet to need these, but it provides me with a good sense of security.

I was with a friend in Cambodia who was traveling the world with only one ATM card. Someone hacked her account and was stealing her money. She reported it to the bank and after some faxing and other documentation she got her money back, but they had to cancel her ATM card. She was without any way of getting cash until she could get to a place where they could mail her a new card. Fortunately she was with me and I loaned her money, but it was 3 weeks before she was in a city where she had a friend who could receive the new ATM card for her. That’s a big problem if you don’t have a backup!


I encourage people to notify your credit cards and banks about your travel. Many of them have sophisticated algorithms to pick up on fraud. Often these algorithms will flag activity from foreign countries, so if you don’t tell them you are traveling they might put a hold on your card when they see the odd purchases or withdrawals. That’s a hassle you don’t want to deal with while traveling.

Peer to Peer Currency Exchange

Lastly, I have to mention peer to peer currency exchange before closing out this post. WeSwap is one company offering this service that I’ve written about previously. If you are nervous about assuming there will be an ATM in the airport when you arrive in a new country (99% of the time there really will be one), and you want to get some local currency in advance, peer to peer currency exchange is your best choice. Unfortunately I don’t know of one that serves the United States right now, but hopefully soon.