Select Page

Exchanging Your Money While Abroad: The Best Ways to Save Money

Exchanging Your Money While Abroad: The Best Ways to Save Money

For travelers who are abroad and need to find the best way to get at their money, we’ve put together this article. This is quite a bit different than finding the best ways to send money abroad in that we are assuming you are abroad and looking to get at your money without paying through the nose in ATM fees and currency exchange fees. Exchanging your money while abroad is not as difficult as it first seems. Having said that, if you do some pre-planning before you go, you can really save a lot of money.

Make Sure You call Your Bank / Card Company and Inform Them You Are Travelling

Before you run off and start exchanging your money while abroad, find out what your debit and credit cards are charging.

You may simply be able to use your credit card or debit card in stores and at ATMs without any fuss and without being stung with a terrible exchange rate. On that note, be aware that some banks will freeze your accounts if you suddenly start spending in another country because they may believe your details have been stolen.

On that note, be aware that some banks will freeze your accounts if you suddenly start spending in another country because they may believe your details have been stolen.

Get Travel Insurance

Why am I starting this article with insurance…am I mad? What does this have to do with changing your money while you are abroad? What it has to do with it is the sheer amount of suckers who happily take big wads of cash abroad and are immediately relieved of it while looking for a taxi at the airport.

If you are going to conduct money transactions abroad, such as currency exchanges, then don’t go without insurance. There’s also stuff like your getting your bag (and all the valuables in it) stolen, losing your luggage, missed flights, and all that.

There’s also that risk of an accident happening and you getting stuck with huge medical bills for emergency services. Don’t be that guy (or girl) who has to post a GoFundMe for aid.

So Travel Insurance may cost you a few more dollars on the upfront, but if you need it, you’ll be glad as hell you bought it.

Choose to Pay in the Local Currency When Using a Credit or Debit Card

Exchanging Your Money While Abroad different types of currency

If you use your credit card or debit card in shops and you are given the option (via the machine terminal) to pay in the local currency or your home currency, choose the local currency option. If you do not, you are likely going to be given whatever ‘rate’ your home bank decides to give you which is usually 2.5%-3.5% on top of the crappy exchange rate you’ll already be getting.

So ALWAYS choose the LOCAL currency option. There are some exceptions of course (this may depend on the country you are in and your home bank your card is attached to), but the general travel rule of thumb is to choose the local currency option when using your plastic to pay.

Avoid Using Your Debit Card Abroad

Some debit cards (bank cards) are terrible for use abroad. Some banks and money companies have sneaked charges into their terms and conditions where you will pay extra for using your debit card. They will make you pay a nasty exchange rate, a withdrawal fee, and a spending fee.

Case in point: when I use my Canadian debit card in Thailand, my bank charges me nearly 7 USD because the card is used outside Canada. This is not counting the local ATM fee’s charged and the crappy currency exchange rate the bank itself gives to do the currency exchange.

The point is here that you should try to avoid using your debit card to withdraw cash from a foreign ATM; make other arrangements before traveling so you do not get hit up with these fees.

Open a Local Bank Account and Use Transferwise to Send Converted Currency to It

Now, this is a bit of a convoluted way to do it and is probably only suitable IF you are traveling abroad and will be staying in a single location/country for a period of time (more than a month). For English teachers, expats, or long-term tourists, or digital nomads, this is one of the best methods.

  1. First, you need to sign up for a Transferwise account.
  2. You need to create a local bank account in the country you are staying in. Your ability to create a bank account as a tourist will depend on the country you are staying in. For example, it’s possible to create a local bank account with Bangkok Bank in Thailand, even as a tourist with nothing more than a letter from your Embassy or a rental contract. Surprisingly, many countries will let tourists create a local bank account.
  3. Then do a wire transfer from your home bank to your new bank account in the country you are staying, using Transferwise (see our review of Transferwise). You’ll need to be able to wire transfer money remotely via online banking or have someone wire it for you since you won’t be in your home country. Also, note there may be a fee for the wire transfer.
  4. In 4-6 days, you’ll have significant savings due to much better currency conversion rates.

Transferwise Currency Conversion

This method works best for larger sums — several thousand dollars or more. If you are just trying to send over under 1000 bucks, it might not be worth it. You can also use something like CurrencyFair as an alternative to Transferwise.

Plan Your Spending to Save on Spending While Abroad


As my grandmother said, a penny saved is a penny earned.

Sometimes the best way to save money is to spend LESS money!

While its interesting to talk about exoitic ways to get the best exchange rates, you can often save the most money when travelling by just planning out how to spend the least money!

Savings that stem from your currency exchange are surely a good thing, but they are not the only savings you can make. For example, you could save money by making smart purchase choices. This would mean you wouldn’t need as much money. That would mean you don’t

For example, you could save money by making smart purchase choices. This would mean you wouldn’t need as much money. That would mean you don’t not need to exchange as much money, which also means you are going to save money that you would have otherwise spent on exchanging your money.

Save money from your exchange by lumping other things into your package holiday. For example, when you book with the travel agency, you could pay to hire a car right there when you buy so that you do not need to convert your currency and pay to hire a car when you are in the foreign country.

Planning is often a good way to save money in the long run. For example, if you book and pay for a meal in advance, not only could you get a better exchange rate while at home, but you may also get a discount for booking early. You may also be able to take advantage of cheaper exchange rates if the rates go up by the time you arrive at your destination.

Bring Cash

Pack Your Wallet Prior To Leaving IMAGE

A little preparation goes a long way. This is assuming some pre-planning on your part.

Bringing cash with you can reduce (or avoid) ATM usage and allow you to get the best currency exchange rates beforehand.

How much cash to bring?

I typically like to bring 500 to 2000 in cash with me, already converted. It saves the hassle of having to do on-the-ground conversions when I land. At the very least, this saves you from having to hit up a local ATM and get hit up on bad exchanges rates and ATM fees.

There is a risk of course to bringing cash. You can lose it easily. So you’ll have to decide if it’s worth the risk over just paying the extra fees to use debit or credit cards while abroad to avoid that risk

You really have two choices if you decide to bring cash:

1) bringing your local currency then finding somewhere to do the currency exchange while abroad

2) converting your local currency beforehand while in your home country

Generally speaking, #1 will get you a better rate as it’s easier to say hit up a forex exchange while abroad and likely get a slightly better rate than you could back home as that exchange will deal in the local currency, while a forex back home won’t. This depends though.

You might also be best off doing the currency exchange back home for cash and bringing that local cash with you. Now, this might mean you end up bringing a few thousand dollars in local currency cash with you, which itself poses some risk. You’ll have to weight the advantages and risks.

For the absolute best rate though, consider doing the following (note that it will take a few days to a week, so it’s something to do well before you travel):

  1. create a multi-currency account at your home bank
  2. use Transferwise to convert a few thousand dollars from your home currency to the foreign currency, from one account (your home currency account) to the target account (your multi-currency account). This will get you the best rate by far and in only a couple days likely.
  3. withdraw the converted amount from your bank in the target currency (this should be possible if you have a multi-currency account and you used Transferwise or CurrencyFair to send the converted amount to your multi-currency account)
  4. bring the cash with you when you travel

Us a Travel Credit Card While Abroad

If you have good credit history, it’s possible to get a sweet travel credit card that can provide a hell of a lot of travel perks. The best travel credit cards usually do require good to excellent credit to apply for, however.

If you can get such a card, some of the benefits are:

  • Cashback/air mile points for usage (hotels, air flights, purchases abroad)
  • Bonus Airmiles when first signing up for the card (free travel!)
  • free travel insurance on tickets/hotels booked through card
  • excellent currency exchange rate
  • no currency exchange fees or fee imposed when used abroad on purchases
  • ability to pull money from ATM’s without currency fees or ATM fee
  • worldwide replacement of card if lost/stolen

If you get a good enough travel credit card, you can make a good case for trying to fund your entire trip with that card. This means using it to pay for your travel expenses while abroad, and if the card doesn’t tack on ATM fees, currency exchange fees, or interest fees for pulling out cash, use to card to withdraw local cash from the ATM’s.

Read our best travel credit cards for the guidance of what cards are best for travelers.

Credit Card Travel Tips…

Credit cards are one of the best ways to save while abroad, provided you 1) have the right card and 2) use it properly while abroad in such a way as to maximize savings.

Getting Around Higher Rates On Your Credit Cards

Are there credit cards you can use that only charge higher rates for overseas purchases? If they simply plump up the cost for use abroad, then come back and pay off your credit card bill right away before they may add the plumped up interest onto your balance.

Search Out Credit Cards That Do Not Charge For Withdrawals Abroad


They may not be able to save you very much on your exchange rate, but you may offset your loss with the benefit of not having to pay for cash withdrawals. Typically, such cards are only used abroad, and they will offer you terrible rates and costs if you use it at home. One assumes they want you to use your holiday credit card while you are at home so they may earn more fees. This perk varies depending on the card and bank, so do proper research first! Some cards are great for this, others are terrible.

Look For Duel-Use Overseas Credit Cards

They offer reasonable rates both while you are at home and while you are overseas. Their catch is that they offer a slightly higher withdrawal fee that is usually a percentage. If it is a duel-use card, then you may be able to find one with a very good exchange rate. You may be able to use it without having to physically go around exchanging your money while abroad, (because it is done automatically).

Keep An Eye Out For Load-Free Debit Cards

Most credit cards are going to charge you an extra fee for using your card abroad, especially when withdrawing from an ATM. However, upon occasion, banks and companies that will offer you a load-free debit card where you may use your card as if you are at home. The only downside is that they may hide their fee by offering a very poor conversion rate on your purchases and withdrawals.

Consider Putting an Extra Balance on Your Card Before Leaving

Credit cards often start charging you interest as soon as you pull out cash from the ATM with it. You might find some travel credit cards that don’t, but the rule of thumb is that most credit cards will do so.

These interest rates for pulling out cash are enormous and tallied up by day.

But you can avoid this! To get around this, consider putting a couple thousand dollars deposit EXTRA onto your credit card. If you do this, you can use the card like an ATM card and not tap into the ‘credit’. This means you can get away with pulling out local cash from a foreign ATM without paying credit card interest while taking advantage of the excellent credit card currency exchange rates and no ATM fees (if your card offers this).

Think About Pre-Paid Travel Cards

In these cases, you either buy cards with credit on, or you sign up for an account or load it with your currency. The rate you get is often a very good one because the companies that offer pre-paid cards are good at handling currencies and can often buy when rates are at their lowest. Prepaid cards such as Revolut will offer (read our Revolut review) a very good exchange rate, but in return, you have to pay a withdrawal fee if you withdraw more than $200 per month, which you are likely to do while on holiday. Transferwise, as of late 2017, is considering offering their own travel debit card solution which should be interesting and offer serious savings for travelers.

Try To Avoid Borrowing Money After Using Your Credit Card

You may have found a way of saving money by withdrawing money from your credit card while you are abroad. If you have, thanks to a reward or incentive scheme, then good work–but beware of the possible damage to your credit rating.

Typically, you should only use less than 35 percent of your credit. Your ‘credit utilization’ (how much of your total available credit) is one of the factors that determine your credit score. Use too much (the typical figure for ‘too much’ is more than 35% of your credit) and your credit score may take a little hit.

So if you are living on your credit card by withdrawing money out of a credit card from a foreign land. for months at a time, expect a small effect on your credit rating.

The reason being that if you use too much credit, it looks like you are living beyond your means, and you are using credit card/loans/overdrafts to fund your lifestyle.

If you are planning on coming home and then making a mortgage application, applying for finance for a purchase, or getting a loan/overdraft, then you should really wait at least six months before you go through with it. Otherwise, you may find yourself with a rejection marker on your credit history when the credit companies deny your application.

Consider Using Bitcoin While Abroad

Another option to save money is to use Bitcoin to save on fees. Many countries do offer Bitcoin ATMS and may allow you to pay for online purchases in bitcoin. This means you can book hotels, pay for flights, and take out LOCAL cash using bitcoins.

Bitcoin typically has very low to no fees if using it to pay for something. And if you convert your bitcoin to a local currency via a Bitcoin ATM, the currency exchange rate may be close to mid-market rates (so better than say using your credit card or ATM to withdraw cash). You’ll need to make sure though, but if used right, Bitcoin can save you loads in currency exchange fees.

Now, this is obviously a solution for the more technically adept (getting your hands on bitcoin is not that easy for the regular person) and not every country (especially developing countries) will have a Bitcoin ATM. For places like Europe or North America, however, using bitcoin to fund your travel is an intriguing possibility.

Wait For The Right Time At Home To Execute The Currency Trade

a cartoon screen full of forex prices

Okay, I admit that this is not a way of exchanging your money while you are abroad, but it is a funky way of saving money on your money exchanges. It is not even a sophisticated trick, you simply sign up for email alerts from a conversion company. Ask that they email you when the exchange rate reaches an amount you are comfortable with, and execute your currency exchange when the rate is where you want it.

For example, Transferwise have a rates alert. You can have it email you every day with your desired exchange rate so that you may see if the rate is running in the right direction, or you can have it email you when it reaches a new low so that you may execute your trade right then.

Avoid Buying Currency With Your Credit Card

If you do use a currency exchange online and decide to fund that transaction with your credit card, beware! If you are at home on the Internet or abroad on the Internet, you are going to have to pay an extra charge if you buy currency with your credit card.

Even if the exchange broker is kind enough not to charge an extra fee for you using your credit card, your credit card company will still charge an extra fee because a money exchange is considered to be a cash advance.

Do Not Buy At Airports Or Ports


Before you go exchanging your money while abroad in the airport, remember that the moneychangers do not have any incentive to give you a great deal. They know you are going to need money for taxis, train tickets, and even hotel rooms. They also know you are a captive customer because your options are very limited if you are in a new country and your debit card isn’t working or you haven’t planned ahead and bought currency already. Airports and sea/ferry ports will often have the very worst exchange rates.

Conclusion – The Problem Is Not Knowing

Think of this–in your country, there are hundreds/thousands of companies and banks that are competing to change your US dollars into another currency. Whereas, if you are in another country, there is not as much competition for turning dollars into a different currency. Yet, with that said, there are plenty of foreign exchange companies that have bought at the right time and are now able to offer fantastic exchange rates. To quote the header, “The problem is not knowing.” You don’t know if you will get a good deal until you arrive at your destination and start exploring the local money exchangers.

About The Author

Ash The Great

After a varied career in different industries from the hospitality industry to the financial consultancy industry, Ash now spends his days working as a professional writer.

Leave a reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Popular Posts