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Exchange Program

You can’t control official market rates while traveling abroad, but you can avoid foreign transaction fees and get the best exchange rate.

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Complicated boards with buy and sell rates, hidden commissions, and impatient bank tellers. Exchanging currency used to be one of the most daunting aspects of international travel. But, thankfully, widespread global acceptance of credit and debit cards has largely eliminated the need to deal with currency-devaluing airport exchange counters (where a loss of 5%–10% was not uncommon). That said, in many instances, fees still exist when using credit and debit cards internationally, and currency exchange can be a money-losing situation if not handled properly. Here’s how to avoid such fees and ensure a more even exchange.

Use the Right Credit Card to Pay for Everything

The key to getting the best exchange rate is to make all purchases with a no-foreign transaction fee credit card. The industry standard is 3% on foreign transactions, but most top-tier credit cards have removed this fee as a cardholder benefit. When everything’s said and done, you are making purchases at the official market exchange rate for the day (which is the best scenario possible). Cards with no foreign transaction fees include:

  • Chase Sapphire Preferred®
  • Chase Sapphire Reserve℠
  • Citi Prestige® Card
  • Gold Card from American Express
  • MasterCard® Black Card™
  • MasterCard® Gold Card™
  • MasterCard® Titanium Card™
  • Premier Rewards Gold Card from American Express
  • The Platinum Card® from American Express

Make Sure the Charge Is in Local Currency

In many instances, smart credit card readers are now able to detect your credit card’s country of origin. When a card is swiped or inserted into a chip-and-pin machine, you will be asked if you’d like to make your purchase in local currency or in your home currency. Always choose local currency as the latter does not use the official market exchange rate—it’s often a rate that will cost you 3%–5% more.

Don’t Use Debit Cards for Purchases

All debit card purchases incur a 3% foreign transaction fee except cards issued by the following banks: Charles Schwab Bank, Capital One 360, and Discover Bank.

Pay Attention to ATM Fees

Of course, in some places and situations cash is necessary and charging everything isn’t possible. Don’t bother exchanging currency before your trip—this is always a money-losing endeavor—all international airports have ATMs in the arrivals area. Use your debit card to withdraw money, which will exchange currency at the official market rate plus an exchange fee (in the range of 1%–3%) and sometimes an additional flat withdrawal fee. To avoid these fees, we suggest getting a Capital One 360 credit card, which charges neither a conversion fee nor a flat withdrawal fee. By comparison, Bank of America charges a $5 flat fee plus 3% of the amount withdrawn and Chase Bank charges $5, or 3% of the amount withdrawn (whichever is greater).

Get with the Times

Forget about those American Express Travelers Cheques. Few places still accept them, and, on average, your dollar is devalued by 5%–10% as foreign banks offer inferior exchange rates upon conversion. Also, walk right past those airport exchange rate counters that still prey on unsuspecting tourists. Don’t be fooled by the “no commission” policy: There may be no commission per se, but these exchange rates are vastly different from market rates, resulting in large differentials against your favor. As proof, just look up the official rate on your smart phone.


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Award-winning travel writer and economist Paul Rubio is a credit card enthusiast, whose sophisticated use of points and rewards has helped him travel to 132 countries for free. Paul is a Harvard graduate with a master’s degree in public administration and a master’s degree in economics. He also holds a bachelor’s degree from Boston University with a double major in economics and environmental policy and a minor in conservation biology. He attended both undergraduate and graduate schools on full scholarships. Paul worked in the field of wildlife conservation before embracing his writing talents full-time in 2008. Since then, he has won more than two dozen national awards for his exemplary work in travel journalism. The prolific writer contributes to a number of top-tier international, national, and regional publications including Condé Nast Traveler, Florida Design, Fodors.com, Palm Beach Illustrated, and Robb Report.