Bad currency decisions cost travellers hundreds of dollars every trip. Here's exactly what to do with your money before you leave, at the airport, and on the ground — and what never to do.
Currency exchange is one of the most reliably exploited aspects of travel. Airport exchange bureaux, hotel desks, and tourist-area currency shops make their money from travellers who haven't done fifteen minutes of research. The good news: the right approach is simple, and once you've done it once, it becomes automatic.
The Core Rule: Never Exchange Currency at the Airport
Airport currency exchange desks offer some of the worst rates available anywhere. The markup over the mid-market rate (the real exchange rate) typically runs 8–15%. On a $500 exchange, that's $40–75 handed directly to a currency desk for the privilege of convenience. The only exception: if you need a small amount of local currency for transport on arrival and have no other option, exchange the minimum necessary — $50–80 — and get the rest through an ATM once you've arrived.
The Best Way to Access Money Abroad: ATMs
A local ATM in your destination country will almost always give you the closest rate to the mid-market exchange rate available to a retail traveller. The key is pairing an ATM with the right card.
Cards Worth Getting Before You Travel
Most standard bank cards charge foreign transaction fees (typically 2–3% per transaction) and currency conversion fees on top. Over a two-week trip, these add up significantly. Cards worth switching to for travel:
- Wise (formerly TransferWise): Uses the mid-market rate with a small transparent fee. Free ATM withdrawals up to a monthly limit. Available in most countries. The best option for most travellers who don't want a dedicated travel credit card.
- Charles Schwab Investor Checking (US): Refunds all ATM fees worldwide, no foreign transaction fees. Widely considered the best US bank account for international travel.
- Revolut: Excellent exchange rates within monthly limits, widely available, and the app gives real-time spending visibility that's useful for tracking your budget abroad.
- Chase Sapphire Preferred / Capital One Venture (US credit cards): No foreign transaction fees on either. Use for hotel bookings and larger purchases where credit card fraud protection matters.
Always Choose Local Currency at the ATM
When an ATM abroad asks whether you want to be charged in your home currency or the local currency, always choose local currency. The option to pay in your home currency (called Dynamic Currency Conversion) sounds convenient but uses an exchange rate set by the ATM operator rather than your bank — typically 5–10% worse. This is one of the most common ways travellers unknowingly lose money.
How Much Cash to Carry
The right balance depends on your destination:
- Western Europe, Japan, Singapore, Australia: Largely cashless. A small amount of local currency ($50–100 equivalent) covers markets, tips, and any vendor that doesn't take cards. Pay most things by card.
- Southeast Asia, India, most of Africa, Central America: Cash is frequently necessary — smaller restaurants, tuk-tuks, market stalls, guesthouses in rural areas, and many transport options don't take cards. Carry $100–200 equivalent in local currency and replenish at ATMs as needed.
- Very remote destinations: Withdraw enough cash for your entire stay before you leave the nearest city. ATMs in small towns and rural areas are unreliable, frequently out of cash, and may charge additional fees.
The Backup Card Rule
Always travel with at least two cards from different networks (e.g., a Visa and a Mastercard) stored separately. If your primary card is lost, stolen, skimmed, or blocked by your bank's fraud detection, your backup card is what gets you to safety. Keep one in your wallet and one stored separately in your bag or accommodation.
Before you leave: notify your bank of your travel dates and destinations. Banks block cards flagged for unusual foreign transactions — a quick call or app notification prevents your card being frozen on day one of your trip.
Currency Exchange: When You Actually Need It
Sometimes you do need to exchange physical currency — for destinations where ATMs are unreliable, or currencies that aren't widely available at ATMs abroad (some smaller currencies need to be purchased in advance). When exchange is unavoidable:
- Use Wise or a bank transfer to load a Wise card with local currency before you travel — you get the mid-market rate with a small transparent fee
- In-city exchange bureaux beat airports significantly — search for well-reviewed local exchange shops (not chains) in city centres
- Check the mid-market rate first on Google or XE.com so you know what a fair rate looks like before negotiating
- Avoid hotel front desks — hotels typically offer worse rates than airports
Tipping: What You Actually Need to Know
Tipping norms vary dramatically by country and getting them wrong in either direction is uncomfortable:
- USA and Canada: 18–20% at restaurants is expected, not optional. 15% minimum. Uber Eats and food delivery tip culture has extended into many service contexts.
- Europe: Rounding up or leaving small change is appreciated but not expected. Service charge is often included in the bill — check before adding more.
- Japan: Tipping is considered rude. Do not tip. It can cause genuine offence.
- Southeast Asia: Not traditionally expected but appreciated in tourist-facing restaurants. Round up rather than calculating a percentage.
- Africa, Middle East, Latin America: Tipping for guides and drivers is standard and important — these tips form a significant part of their income. $10–20/day per guide is the norm.
Quick Reference: What to Do
- Get a no-foreign-transaction-fee card (Wise, Schwab, Revolut) before you travel
- Carry a backup card from a different network, stored separately
- Notify your bank of travel dates
- Use local ATMs for cash — choose local currency, not home currency
- Never exchange at the airport except for a small emergency amount
- Research local tipping norms before you arrive
More practical travel guides: Solo Travel Safety Tips · What to Do When Flights Are Cancelled · Estimate Trip Cost
