How to Avoid Currency Conversion Fees and Save Money Overseas

Traveling abroad can be an exciting adventure, but the surprise fees that come with exchanging currency can quickly add up. Many banks charge a 3% fee for foreign transactions, which can be a significant amount of money for frequent travelers.

To avoid these fees, consider using a credit card with no foreign transaction fees. Some credit cards even offer 1-2% cash back on international purchases.

You can also use an ATM card that doesn't charge foreign transaction fees, like a debit card linked to a US bank account. Just be aware that some ATMs may charge a withdrawal fee.

By being mindful of these fees, you can save money and enjoy your trip without financial stress.

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Your bank or credit union is often the cheapest place to exchange currency, with many offering this service to customers with a small fee for small transactions.

To get the best currency exchange rates, use a trusted source like Reuters to find the current exchange rates.

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You can order currency at a branch location, by phone, mobile app, or online, and have it delivered to you or pick it up at a branch.

Some currency providers allow you to pick up your funds as soon as the next day, while others take one to three business days or offer overnight shipping.

Federally insured by NCUA means your bank or credit union is a safe place to exchange currency.

Use a reputable exchange rate app or website like XE Exchange to find the most accurate exchange rate data and compare rates to your currency exchange.

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Online bureaus and specialist currency conversion services are a great alternative to airport currency exchange. They often offer more competitive rates than airport kiosks, but still include a markup that can increase the overall cost.

Some online bureaus, like Currency Exchange International, promise to match or beat the exchange rate given by a local bank or airport for the same foreign currency and service on the same day. However, this doesn't guarantee a lower rate.

Using a credit or debit card to buy local currency online can be a convenient option, and the currency can be collected from an agent location or courier delivered to your home address for safety.

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Currency conversion fees can be a significant expense when traveling abroad. A typical currency conversion fee is 1% of the purchase price, levied by a credit card payment processor or network, or the ATM network in the case of cash withdrawals.

Card issuers can also charge foreign transaction fees, which may include the currency conversion fee. This can add up to a total foreign transaction fee of 1% to 4% of the transaction amount.

To put this in perspective, if you exchange $1,000 at an airport kiosk, the exchange rate may be $0.7799 per $1 converted, resulting in a 75.50 euro fee due to the exchange rate markup. This highlights the importance of understanding currency conversion fees to minimize them.

Some credit and debit cards don't charge foreign transaction fees, making them a great option for frequent travelers. These cards may also offer additional travel benefits, such as airline miles, cash back, and lost luggage insurance.

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Here are some common types of currency conversion fees to be aware of:

You can exchange currency at local bank branches, which often offer better rates than airport kiosks and other tourist spots.

Make sure to bring your passport, as most banks require it for currency exchange.

Foreign bank branches typically dispense larger amounts than ATMs, making them a good option if you need a lot of cash.

Ask about fees upfront, so you're not surprised by any additional charges.

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A currency conversion fee is a charge that financial institutions or networks can impose when you convert one currency into another. This fee is often referred to as a foreign currency conversion fee or foreign currency exchange fee.

These fees are one of several charges that credit and debit card users have to pay when making a purchase in a foreign country.

Conversion fees can be a sneaky expense on your international trips. A currency conversion fee is usually 1% of the purchase price, charged by a credit card payment processor or network, or the ATM network in the case of cash withdrawals.

You may also be charged a foreign transaction fee by your card issuer, which can range from 1% to 4% of the transaction amount. Some credit and debit cards don't charge foreign transaction fees, making them worth applying for if you plan to do a lot of travel abroad.

Dynamic currency conversion, or DCC, can be an even more costly option, with exchange-rate markups of 2.6% to 12% on top of the regular currency conversion fee. It's always best to choose to pay in the local currency when abroad to avoid these extra fees.

To give you a better idea, here are some examples of currency conversion fees:

In general, it's best to avoid currency exchange at airports, hotels, and popular tourist areas, as they often offer the worst rates. Instead, consider ordering currency in advance from your bank, or using a travel-friendly card that offers relatively good market exchange rates with no foreign transaction fees.

Avoiding currency conversion fees can be a challenge, especially when traveling abroad. One way to minimize these fees is to use a credit or debit card that doesn't charge foreign transaction fees.

If your credit card issuer charges a foreign transaction fee, consider applying for a card from a list of cards with no foreign transaction fees. Many popular travel credit cards, such as the Chase Sapphire Preferred Card, Bank of America Travel Rewards credit card, and the Capital One Venture Rewards Credit Card, give cardholders the ability to use their cards abroad and pay no international transaction fees.

You should also be aware that some credit cards charge a foreign transaction fee even if you're not physically using your card overseas. These fees apply whenever you make a purchase with your card from a non-U.S. retailer.

To avoid foreign transaction fees, it's essential to use your credit or debit card when possible. Check your cardholder agreement to see if your current card charges a foreign transaction fee. If it does, consider applying for a card from our list of cards with no foreign transaction fees.

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Fees aside, using your credit or debit card is probably your safest bet for getting an exchange rate that's closest to the market rate. But be aware that while your card's issuer bases its exchange rate on market conditions, it does set its own exchange rate for transactions.

Here are some tips to help you avoid currency conversion fees:

Using a credit or debit card is a smart choice for avoiding currency conversion fees, as long as you find a card with a low foreign transaction fee.

You'll also want to pay in local currency to avoid Dynamic Currency Conversion (DCC).

Consider applying for a card with no foreign transaction fees before your trip, allowing ample time to process your application and receive the card in the mail.

Credit and debit cards offer fraud protection and safety features, making them a safer option than cash.

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Using a credit or debit card can be a smart choice when traveling abroad, as long as you keep an eye on the fees and find a card with a low foreign transaction fee.

You'll want to pay in local currency to avoid Dynamic Currency Conversion (DCC), which can give you a less-than-favorable exchange rate.

Using a credit card to make ATM withdrawals isn't usually a good idea due to cash advance fees and interest charges.

Consider applying for a card with no foreign transaction fees before your trip, and check your cardholder agreement to see if your current card charges these fees.

Some debit cards charge out-of-network transaction fees, so call your bank before your trip to see if your card charges these fees.

It's also a good idea to let your bank know where and when you'll be traveling in advance, to avoid a possible freeze on your card for suspected fraud.

Using a credit card to make purchases can give you a good exchange rate, as long as the card doesn't charge foreign transaction fees.

Fees aside, using your credit or debit card is probably your safest bet for getting an exchange rate that's closest to the market rate.

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Using a credit or debit card is probably your safest bet for getting an exchange rate closest to the market rate. But be aware that while your card's issuer bases its exchange rate on market conditions, it does set its own exchange rate for transactions, which can be updated daily.

You can also order cash through an online currency converter, but exchange rates are less favorable and delivery charges may eat into your funds.

Wise offers a better deal on currency conversion with the mid-market exchange rate and low fees from 0.41%.

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