Is it Best to Exchange Money at Home or Abroad?


When traveling abroad, many questions arise concerning the details of the trip. Is it better to exchange currency before leaving or when you reach your destination? Should you withdraw from an ATM abroad or exchange money to get the local currency? Is there another way? Well, it depends on several factors, such as how commonly accepted dollars are in your destination country, the country’s financial and exchange policies, and your destination itself. It is also dependent on your bank, its exchange rates and charges, as well as the bank’s compatibility with financial institutions in the country you are visiting. The length of your trip also plays a role in determining whether it is best to exchange money at home or abroad. 

In general it is best to research what exchange rates are currently offered, along with any average commission costs that come with exchanging money. You may find that in some places there are no commissions on exchanging currencies, while other countries may often have high commision rates. Knowing this will help inform your decision. This guide will provide further important information to help you decide where is the best place to exchange your money.

Withdrawing From an ATM Abroad

Most travelers use ATMs when abroad as their primary means to get cash. This is because they don’t fancy the idea of carrying around physical currencies up until the moment they land at their destination. ATMs are a common way to get cash when abroad for a number of reasons:

Exchange rates – Compared to money changers abroad, ATMs tend to offer better exchange rates. Of course, you may find money changers offering exchange rates that are even more favorable than ATMs, but they are scarce. 

Availability – In today’s world it’s rare to find a place that has no ATMs. There is usually one in every couple of blocks in the most populated regions. Reputable money changers are few and far between. Nowadays, ATMs are commonplace, at least in most cities.

Security – Walking around with cash in your pockets puts you at high risk of being robbed. If you lose your ATM card or if someone steals it, you have the chance to protect your funds by blocking the card. It is paramount though, to use your card wisely. The fee per transaction may not favor multiple withdrawals of small amounts, in the same manner as you might do at home.

When Not to Make ATM Withdrawals

You may find that exchanging physical currencies is a better option for you in the following cases:

You live near a money changer or bank offering reasonable rates – This is an excellent solution, especially when you need a small amount. This way, you reach your destination worry-free. This is a good option to consider if you will be making a short trip, lasting only a few days.

Your ATM card is incompatible with the destination ATMs – Most of the time, having a debit card allows you to make withdrawals globally. Nevertheless, some smaller banks have not set up international arrangements. So, check before you travel to be sure.

There is restricted access to an ATM in the country you are visiting – Remote areas and islands usually have a few working ATMs and plenty of money changers that will charge you an arm and a leg to convert your money. So, it is much more preferred to have local currency already in your pockets before you get there.

You will be making a large purchase – If you are planning to buy something and the total sum exceeds the daily withdrawal limit, using an ATM will likely not be an option for you.

Why Exchange Currency at Home?

Regardless of which option you choose, at some point you will need to pay in one form or another to make a currency conversion. You may find paying the commission on a paper currency conversion to be less appealing than using your card. That being said, many travelers prefer to exchange their money before traveling overseas, because oftentimes a bank can be found which offers a competitive exchange rate. Plus, it is often more convenient to have dollars already converted into the local currency you will be using before you arrive. 

If you decide to exchange your dollars before you leave, it gives you the opportunity to shop around for the best rate. This is preferable to dealing with the more limited options abroad once you arrive.

Leaving for your trip with a little cash in your pockets, in the form of the local currency for the country you are visiting, is a great way to handle your first minor expenses when abroad, such as the airport taxi service.

How to Shop for Currency Exchanges

Experts advise contacting the branches of large banks in the city you are about to visit. If you are flying to a town with a large international airport, chances are you will find numerous branches that are able to do the exchange for you. In most cases, the offered exchange rate is low and gets even lower if you are a customer of that bank. So, step one is to call and see what exchange rates they offer you.

If this does not work, you can consider using an ATM card abroad to withdraw money. In this case, make sure you check with your bank that you will not activate the card’s theft protection if you take it overseas, as some cards have this as a security measure. It’s best to place a travel notice on your card before you leave, so you can ensure that you’ll have no issues when using it abroad.

Your worst option is to exchange currency at an airport currency exchange kiosk when you land. As a last resort, it will get the job done, but there are other preferable routes to take first. 

Avoiding Paying Fees

Some of the expenses you may need to pay when traveling abroad are currency conversion fees, and foreign transaction fees. Here are ways you can minimise these expenses:

How to Skip or Minimize Currency Conversion Expenses

The primary suggestion is to put most of your expenses on plastic, so you don’t need to deal with currency swaps. Nevertheless, it’s best to contact the card issuer before you travel and ask them whether there are any restrictions when using your card overseas. 

Tip: Write down the card issuer’s phone number  and the cards number in case it gets stolen or lost during your travels. Then store this info somewhere separate from the actual card.. That way, you will be able to call the Customer Service line and block the card quickly in case of theft or loss.

How to Avoid Credit Card Foreign Transaction Fees

The majority of credit cards charge a 3% foreign transaction fee on the purchases you make when abroad. This charge can quickly add up as we tend to use our credit card for nearly everything nowadays, especially while traveling. Choosing a card that charges no forgein transaction fees is the best way to steer clear of unnecessary expenses, and oftentimes earn reward points.

How to Get the Best Exchange Rate Possible

The official exchange rate you see when looking at currency conversions is actually the interbank rate. This means that this rate is offered to major banks only. Whenever you use your card abroad, the local bank converts the transaction into the local currency and then takes some off the top for its services.

The Importance of Having a Contingency Fund

Having a contingency fund in cash is also something worth considering, particularly for trips longer than seven days. Besides having your card, you should also bring some cash along in case you run into ATM issues. Some of the things that could cause headaches when abroad are:

Your card gets stolen or misplaced.

Your card is blocked from your bank.

The card becomes unreadable.

You reach the daily withdrawal limit.

No ATMs within range.

The ATM does not accept the card.

Tip: Ensure you don’t keep your cards and cash in the same place for safety reasons.

Final Tips for Better Travel Experiences When Abroad

When planning for an upcoming trip, consider the following to make it as pleasurable, safe, and convenient as possible:

Withdraw as seldom as you can – This helps you minimize ATM fees and keeps your debit card secure from theft and loss. 

Bring the right card(s) along – Some banks offer cards that feature zero foreign transactions fees or no ATM fees (some even offer both). Securing one of these cards can save you a significant amount of money during international trips. If you had to choose between a card that offers zero foreign transaction fees or no ATM fees, it is best to go with the first one. The ATM fee is usually 1%-3%.

Beware of the Dynamic Currency Conversion (DCC) – Some ATMs offer what is known as Cardholder Preferred Currency or CPC, where they ask you whether you want to be billed in dollars (the card’s original currency) or the destination’s local currency. Always choose the second to avoid having to pay poor exchange rates, along with potential foreign transaction fees.

Cashero can simplify some of these decisions along the way. With Cashero, you can exchange between GBP, USD and EUR, giving you a stress-free approach to exchanging currencies.

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