You’re packed and almost ready for your big trip. But there’s one thing missing: A stash of local currency you can use at your destination. Who is going to give you the best currency exchange without high fees? Let’s break it down.

Exchanging currency

There are many reasons you may need to exchange currency. Maybe you’re taking a vacation overseas, traveling for work or exploring ports of call on a cruise. You may be visiting family in another country, taking a quick jaunt to Canada or Mexico or attending a conference in a foreign capital.

There are various ways to get the type of currency you need for the countries you’re visiting. Before you go, research current currency exchange rates before jumping into any of the options for exchange. The Federal Reserve lists the latest rates, and currency websites like XE.com allow you to calculate how U.S. currency translates into foreign currencies.

3 ways to skip big fees when you need to exchange currency

All currency exchange options are not created equal — some methods come with very high fees, while there are ways to get the money you need for free. Changing money at the “currency exchange” booth in the airport is guaranteed to cost you a lot while using cards and “buying” foreign currency online ahead of time are cheaper options.

#1 Order currency from your local bank or credit union

Your local bank or credit union at home may provide currency exchange services that you can avail yourself of before you leave for your trip. You might have to visit the local office, or you may be able to order the currency you need over the phone or online.

This may be one of the best ways to skip larger fees. However, watch the currency exchange rate your bank is offering; the rate may well be higher than what you will get when taking money out of an ATM at your destination.

One key question to ask is how your bank handles extra currency that you end up returning with. Will the bank take it back in exchange for U.S. dollars, or will you need to do this elsewhere?

#2 Use a credit card with low or no fees

Using a card to make purchases or get money from an ATM can be an excellent option for accessing your funds affordably on your travels. Most credit companies and card issuers charge various fees when you do this, however, so make sure you’re aware of the specifics associated with your card. Some issuers charge a 1-3% fee on foreign transactions. Some card issuers also charge a currency exchange fee of 1-3%.

If you’re going on a long trip, it may be worth getting a new card without these fees specifically for your travels. There are a number of credit cards out there with no foreign transaction or currency exchange fees. At MagnifyMoney, we keep a running list of the best credit cards for travel, which include cards that carry no foreign exchange fees and also offer rewards for your spending.

Even if your financial institution doesn’t charge a fee for using an ATM or charging your card, the foreign company whose ATM you’re using may well do so. Some banks will reimburse those fees, whether for any ATM or for ATMs within a specific network. Charles Schwab, for example, offers unlimited reimbursements for fees for cash withdrawals worldwide from any ATM. Capital One and Varo, on the other hand, offer reimbursement for fees within their respective networks. All of these cards charge no foreign transaction fees and are popular options for travelers going abroad.

When you’re buying things abroad using your credit card, the card reader machine may ask where you want the transaction to be processed in U.S. dollars or local currency. Having your transaction processed in U.S. dollars when you’re in a country that uses another currency is called “dynamic currency conversion.” Always choose local currency; choosing U.S. dollars will ensure you get a fee tacked onto your bill and/or a poor currency exchange rate for the transaction. You are simply wasting money by asking the transaction to be processed in your home currency.

#3 Order currency online before you go

One way of getting a hold of foreign currency before you travel is to order cash online. This option is relatively expensive, but the cost can be worth it for those who like the reassurance of having local currency on hand upon arrival at your destination.

Be careful when ordering online and make sure the site you buy from is reputable. Travelex is one of the most prominent providers of foreign currency and will ship the money to your home. The company provides free next-day delivery for orders of over $1,000 worth of currency. There are no additional fees aside from shipping fees for orders below $1,000.

However, these companies trade money at exchange rates that make them a profit, which means you’ll still be paying more than you would for getting cash in other ways. For example, if the market exchange rate for $1 is 0.880 euros, the Travelex rate will be something more like 0.819 euros, meaning a $100 exchange from dollars to euros will cost a customer an extra $61, not factoring the delivery fee.

What to watch out for

There are various places where you are likely to pay higher fees or get very poor currency exchange rates. And other options are simply inconvenient in this day and age of digital banking.

Avoid exchanging money at airport kiosks

These are very convenient and can be a relief to frazzled travelers arriving at their destination. But they are not your best option; they are one of the most expensive ways of getting local cash. They often charge high fees and/or may present a less-than-ideal currency exchange rate.

The best use for these types of operations is to get a small amount of immediate cash needed to get to a place where the rates are better. For example, if you can’t find an ATM in the airport, use the kiosk to get enough cash to take a taxi to your hotel, where you can inquire about a nearby ATM from which to withdraw a large amount of cash.

Skip currency exchange stores and hotels

You’ll often find stores or booths in foreign cities that tourists frequent where you can easily change your money from home to the local currency. These operations usually have either very poor currency exchange rates or charge astronomical fees. It’s best to think ahead about your currency needs to avoid these places, but they can be worth the extra money if you have a particular need for some local cash from a convenient location. These stores are often downstairs from popular hotels.

Your hotel’s concierge may be able to change U.S. dollars into local currency for you, but this option often comes with the same problem presented by the money-changing shops: poor rates and/or high fees.

Traveler’s checks aren’t your best bet

Traveler’s checks, once the go-to method of bringing cash safely abroad, no longer offer the same convenience that they once did. Many shops and sites no longer accept these as currency, so you’ll need to take the extra time to visit a bank to sign the check over and receive cash in exchange. Banks in some countries may charge a commission for this service while it’s free in others. Considering that it is easy and safe to rely on ATMs for your cash needs while you’re abroad, traveler’s checks are generally more trouble than they’re worth.

Bottom line

There are various good options for on-the-go travelers who need to access local cash affordably.

Using ATMs at your destination is quite likely your best option, but make sure to notify your bank of your travels so your money remains accessible. Watch out for options that are “too convenient,” since you’ll pay the price for the ease of use, and stay away from inconvenient traveler’s checks.

Now that you know where to exchange currency, you can have a great trip with one less headache.

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