What is the best way to exchange money abroad? My parents always said, “Exchange money at the airport.” This is definitely better than exchanging money at a currency exchange bureau (one unfortunate traveler was being charged a 19.7% fee at Western Union). However, the real answer is: never exchange money abroad. Unless I plan to go to Cuba or North Korea, I make all of my purchases with a credit card and withdraw only minimal amounts of money using my debit card.

Exchange Money for Purchases

I use a credit card without foreign transaction fees for purchases (Nerdwallet has a good list of no fee credit cards). I always use my credit card to make purchases in general, but especially so abroad. Why waste rewards points and risk theft? Credit cards give you so many goodies, especially while traveling. Plus, if someone steals my number, I can always have my company remove the charges. Easy.

One other pointer: I always accept charges in local currency, you incur dynamic currency charges when paying in dollars (fodors: exchanging money).

Exchange Money in Cash 

I get all my cash while traveling from an ATM using my debit card. I never use a credit card at an ATM for cash advances, this would require paying the cash advance APR, foreign ATM fee, cash advance fee and the foreign ATM owner surcharge.

The right bank is very important. I have an account at Fidelity, which does not charge any ATM fees (I really mean any – I can use my debit card at any ATM in the world free of charge). The following online checking accounts, as of this date, will not charge foreign transaction fees:

1. Fidelity
2. Charles Schwab Bank (Charles Schwab also doesn’t charge any ATM fees)
3. Capital One 360
4. Discover Bank

Finally, when withdrawing money I always give the ATM card slot a good yank before inserting my card. This video made me paranoid!

I’ll also throw in one additional tip: if you are looking to splurge on your trip, first check business class flight reviews to make sure you are getting your money’s worth!