Another company offers a prepaid chip and PIN card, which allows travelers to load up on euros or pounds and use it like a debit card. They can be a good option for Americans traveling without a card using chip and PIN technology. Stallings says one upside to chip and PIN prepaid debit cards is they can be used in an automated payment machine to buy train tickets and to pay at unstaffed gas pumps and highway toll booths in Europe.
You lock in the exchange rate at the time you load or reload it. Prepaid cards are also convenient and safe since they reduce the need to carry as much currency and because a PIN is usually required to take out funds, Stallings says. Heads up: Stallings warns that some prepaid debit cards can come with substantial fees, may not be usable everywhere and can leave you without funds if stolen.
He advises to read the fine print before purchasing. Airport exchange desks have some of the highest currency exchange rates, which means you pay more in dollars for conversion. Meyers of EuroCheapo. Airport exchange desks depend on their convenience to make money. You'll be better off finding an ATM in the airport and using your debit card to get cash. Hotel exchange desks are just as pricey but for a different reason.
Heads up: Don't be duped by the sign at the currency exchange counter claiming "no fees, no commissions. Some credit card companies give U. It's called dynamic currency conversion.
If you're not careful, dynamic currency conversion could cost you big time. While this seems convenient, it is one of the worst deals in travel and should always be avoided," Fodor's Stallings says. According to Meyers, it's always better to pay in the local currency when traveling. This adds an extra conversion, which is good for the banks but not for you," says Meyers. The extra conversion means you will pay more in fees.
Heads up: According to Stallings, you should insist that your transaction be charged in the local currency or just pay in cash.
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We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Table of Contents Expand. Travelex Money Card. Exchange Money at Your Bank. Debit Card. Credit Card. The Bottom Line. Key Takeaways: Exchanging dollars to a local currency can be costly, depending on the fees charged for the service.
Airport and hotel exchange desks typically charge higher fees than the financial institution you bank with. The best option is to use your credit card while you are traveling and to withdraw money at a foreign ATM, if you can, to obtain cash.
Other options include using a Travelex card or exchanging money at your local bank before you leave. Article Sources. Investopedia requires writers to use primary sources to support their work.
These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. In general, I avoid exchanging money in Europe; it's a big rip-off. On average, at a bank you lose about 8 percent when you change dollars to euros or another foreign currency.
When you use an airport currency exchange booth such as Forex or Travelex, the hit can be as much as 15 percent. But exchanging money can make sense in certain situations, including emergencies if your card — or the only ATM in town — doesn't work , or when crossing into a country that uses a different currency.
If you do need to exchange money, look for places that don't charge a commission. Note the difference between the rates for buying the bank buys foreign currency from you to exchange into local cash and selling the bank sells foreign currency to you. A good rule of thumb: The difference between the buy and sell rates should be less than 10 percent. Use local cash. Many Americans are thrilled to find a store advertising "We accept dollars.
Without knowing it, you're changing money — at a lousy rate — every time you buy something with dollars. Likewise, in some non-eurozone countries, the euro is commonly accepted, but usually a bad deal.
For example, in Switzerland, which officially uses Swiss francs, some ATMs give euros, prices in touristy areas are listed in both currencies, and travelers can get by with euro cash. But if you pay in euros, you'll get a rotten exchange rate.
Ideally, if you're in a non-euro country for more than a few hours, head to the ATM and use local currency instead. Use your credit card to get cash only in emergencies. If you lose your debit card, you can use your credit card at an ATM to get a cash advance — but you need to know your PIN, and you'll pay a sizeable cash-advance fee.
Don't stress over currency conversions. Local currencies are all logical. Each system is decimalized just like ours. Only the names have been changed — to confuse the tourist. Examine the coins in your pocket soon after you arrive, and in two minutes you'll be comfortable with the nickels, dimes, and quarters of each new currency. You don't need to constantly consult a currency converter.
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