Since at least biblical times, money changers have been gouging foreign visitors exchanging their currency for local shekels. Fortunately, if you’re going outside the U.S. this summer, you can avoid most of the gouge. Unless you’re a currency speculator, you’ll almost always lose a little in exchanging your dollars for whatever, but you can keep those losses to no more than around 1 percent:
These days, using the right plastic can limit your loss to that 1 percent. That means both a credit card and a debit card
Credit Card
These days, a lot of credit cards, especially co-branded travel-related cards, have stopped surcharging foreign charges. They no longer charge a fee at all or add just the fee of 1 percent or less to cover the network transaction cost. To keep losses to a minimum, the traveler’s key rule is to put as many bills on a no-surcharge credit card as possible.
Debit Card
You may not need much local currency, but the best way to get what you need is to get it from a local bank’s ATM. But finding the right card and the right ATM can sometimes take some digging. Although a large foreign bank’s ATM generally uses the bank rate for conversion, when you use a debit card at a foreign bank’s ATM you face up to three possible fees:
To avoid these gouges, you need a debit card account with a bank that (1) charges no exchange fees on foreign withdrawals and (2) absorbs some or all foreign-bank fees as well. If your regular bank doesn’t offer such an account, do what I do: maintain a small no-fee checking account with a small local bank that I transfer money to before a trip but otherwise keep idle. Your best bets for such a “travel money” account are credit unions, former savings banks, and online banks.
Cashless Traveling. Forget the old “tip” that you need to get local money before you arrive. Last October, I traveled from Gatwick Airport to my London hotel without handling a single pound or pence. And when I tried to buy a can of Sprite at St. Pancras station using coins, the attendant said, “Sorry, we don’t take cash here.”
Avoid Traps. Keep Away From Three Major Gouges:
Exceptions
These recommendations apply to countries with stable currencies. There are still places—Argentina, most noteworthy—where the official exchange rates are unrealistic. Check before you visit any country that might have a currency problem.
What’s in Your Travel Wallet. Check the card(s) you normally carry. If your cards don’t avoid the fees, get some that do.