What’s the Most Efficient Way to Manage Foreign Currency for a Trip?

My preferred method of getting foreign currency is to take it out of an ATM on arrival in another country. That way — even with foreign currency transaction fees — you’re getting a bank’s rate on the transaction rather than a retail rate. And I have an ATM card that doesn’t charge me foreign transaction fees. The most popular one of those among travelers is probably Schwab.

And the way I’ve always converted leftover cash at the end of a trip is to use it to pay any hotel folio balance on my last day. Another trick is in many countries to add it to a Starbucks card. (Those two strategies, combined with a credit card that doesn’t add foreign currency transaction fees, keeps the excess cost of purchases abroad low.)

But I don’t really do either of these things anymore. I like to have cash on arrival and not have to dart for an ATM at the airport. So in any country, with any currency, that I’m likely to visit/use again I don’t turn back any excess cash before leaving. I keep Euros, Pounds, Baht, Pesos (of various nationalities), Dong, Dollars (of multiple kinds).

Because I’ll use them all and in most cases within 18-24 months.

Strictly speaking that means I’m holding excess cash (I have more foreign currency in total in the form of cash than I do US dollars) and am therefore not earning a rate of return on it. So it may not be the most efficient. But I view it as a convenience premium to have that cash when I need it, to save myself two in-country transactions.

I bring foreign currency with me on my next visit, along with no foreign currency transaction cards (Sapphire Preferred is especially desirable with no such fees and earning double points on all travel and dining which is what most of my foreign spend will be.)

What’s your foreign currency routine? How do you buy it, and do you convert it back to your home currency when you leave a country?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. If I’m driving, I always fill up the car on my way to the airport to get rid of remaining local currency.

    Unfortunately, that strategy is harder if you’re taking a taxi, because you’re usually not sure how much the fare will be.

    And, often, at the hotel, I’ve either prepaid or am using award points.

    I generally don’t like to bring the currency home, because it’s a nuisance to deal with, I might forget it on my next trip, and it might decrease in value (some strong currencies, of course, might increase in value!). But I don’t mind keep small amounts of foreign currency that I’ll obviously be able to use: Euros, Pounds and Canadian Dollars come to mind.

  2. I experimented on a recent trip to France,Iceland and Sweden and never had cash in my hands once. My Barclay chip & pin card worked literally everywhere, even if the stupid thing is primarily chip & signature. To be fair I had $50 in Icelandic currency that I took out of an ATM just in case, but never needed it and used it up my last day. I think that’ll be my plan from now on. Get a day’s worth of cash but use the card wherever possible. I just with there was a card that is primarily chip & pin to get rid of the annoying signature step.

  3. I have an identical strategy as Gary, except my TD Bank ATM card refunds all ATM fees every month, whether they be from a bank in Manila, KSA or the cash machine in the bodega around the corner. I do need to call their 800 number on the back of the ATM card before a trip and notify them of when/where I’ll be outside of the US, otherwise it can take a few hours for them to activate my card wherever I happen to be.

  4. I have come to the exact same strategy……I use Pentagon FCU for cash advances at ATM’s and manage the money movement easily online…….then I keep the leftover pounds, euros, etc……both bills and coins……..You never know when you will arrive at a new terminal that requires the foreign COIN to get a luggage cart and there is no shop to convert or make change before exiting security……Hamburg we’re looking at you………

  5. China is always the hardest place to manage — getting cash from ATMs rarely works unless at an American hotel and credit cards are hit and miss in local shops.

  6. Many US banks have affiliates in other countries, allowing you to use your card in their ATM, without fees. My Bank of America ATM card can be used fee-free in Mexico, at Santander Bank, except for the 3% conversion fee. Is there ANY way to get around that pesky conversion fee?

  7. @The Masked Poster

    Use Schwab, no FTF or ATM Fees anywhere.

    I believe Fidelity also unofficially offers this.

  8. I don’t mind going to an ATM upon landing, have never had in issue in 30-40 trips.

    Spend down the cash at the last hotel if possible, holding back roughly taxi fare plus $10 to $20 equivalent. If euros or pounds, I keep it; others buy stuff at the airport.

  9. I’m pretty fanatical about spending all my local currency before I depart (usually to settle my hotel folio – thanks for the Starbucks trick, Gary!!) but it came back to bite me once. In Switzerland, I checked a bag in a train station locker, and put the 6 Swiss Francs in coins into the slot. Lo and behold, when I returned to retrieve the bag, after spending all my Swiss $$$, the locker required another 6 Francs to retrieve it, cuz I’d left it for more than 24 hours. Caveat emptor!!

  10. while I try to use credit card as much as possible, I find it necessary to have cash for tips, etc. So I now keep all leftover currency after a trip, and if I decide it’s not needed, I “sell” to a friend or neighbor…

  11. We keep Ziplocks with the various types of foreign currency that we use regularly-British £, Euros, Mexican Pesos, Swiss Francs and Canadian dollars. We also have a dish full of random coins, some of which are extinct and some of which are just curiosities. We also like to donate spare foreign money on the airplane or at the airport.

  12. I purchase foreign currency through my brokerage account with next day delivery. Any foreign currency, excluding coins, can be returned for credit.

  13. I use cash most of the time, but will pay large bills (ie hotel folio) on credit. I got grandfathered into a plan with my current bank that refunds ALL ATM fees, no matter where or how much.

    Since I budget for my trips, I have a general clue how much money I’m going to spend. I usually don’t have much extra, and frequent trips to the ATM don’t cost *me* anything. So that’s what I do.

  14. @ LoneTree, #7
    B/A waives the FTFs and ATM fees for those using an affiliates’s ATM, but they DO charge a 3% fee to convert dollars to the foreign currency. Does Schwab collect that from you?

  15. @The Masked Poster:

    Nope. Schwab refunds fees at any ATM and does not collect fees to convert currency. It’s the main reason I switched to them since I’ll be living abroad but paid in USD deposited into a US account.

  16. My “method” is almost identical — I have started keeping my leftover change/money from prior trips to places to which I plan to return.
    One thing that I would add is that is almost always a bad idea to change USD to the currency of your destination while you are still in the US (especially at the airport). The exchanges in airports in foreign countries have bad rates, as well, but not near as bad as those at US airports. Hvaing the leftover money from a prior trip usually gets me to my hotel and into my trip, which allows me to find a better rate at local exchange booths.
    Also, I take a couple of days expenses in cash (new hundred dollar bills) on me in case there are issues with my Schwab card. I have had a couple of issues (wouldn’t work with certain ATMs in Hong Kong and Macau; had issues on my last day in Thailand), but luckily they have been few and far between.

  17. I bank with Fidelity, so I just use my debit card at ATMs to withdraw local currency. I’ll do it every couple of days since the ATM fees are refunded. I’m usually good to within 50 euro or so when we visit Italy. My Amex Platinum and CSP are both chip+sig, so I’ll use those for restaurants and hotels as long as they take cards.

  18. I’ve run into this problem a ton of times and like Gary hated waiting in line for the airport ATMs, so I ended up starting a company aimed at handling all the mundane errands that go into preparing for a trip (including cash on hand). Take a look, we’re still in beta, so any advice is appreciated – http://www.attachearrivals.com

  19. About the same as Gary. I have slim wallets for each of the major currencies, with an outside zip pocket for coins, transit cards, etc. I like to keep enough to get me from the airport to the hotel – no worries about lines at ATMs, or managing money while carrying bags.
    For obscure/unconvertible currencies and really small change, I hoard it from various trips and then drop it all in a Unicef envelope.

  20. Leftover currency I either

    – use at the hotel (as you do) if in a country where I might not come back anytime soon, especially if I use the hotels transport to the airport, so no taxi issues

    – blow at the airport

    – convert into euros/dollars/currency of next stop even if losing some in the process

    As opposed to you, I tend not to hang on to anything since I once discovered hundreds of euros worth notes of different currencies in my drawer laying around waiting to be used “next time”

  21. I will carry a small amount of local currency with me upon departure, then rely mostly on cash from ATM’s at the destination. Unfortunately my bank charges fees,so I may look into Fidelity. I rarely exchange currency at retail counters, although Japan is sometimes an exception because many ATM’s won’t accept cards issued by non-Japan banks (tip: there is a Citi ATM near the esclalator at Narita that will).

    I bring home leftover currency and use it next trip. My credit card strategy is AMEX Platinum (chip & sig), Chase Ink Bold MasterCard and Sapphire Preferred Visa, depending on nature of expense and whether personal/business.

  22. I usually try to end up with no more than 10-12 “x” by the time I hit the airport, since I don’t travel often enough to justify keeping foreign currency. I just returned from 3 weeks in the Baltic Sea countries–ALL of which have different currencies. Thank you Schwab ATM card! (And thanks for the Starbucks card tip–I plan to use that one next time.)

  23. I do the same thing. I have a place where I store different currencies I’ve picked up from around the world segregated in baggies. Way more convenient than hunting down the ATM at the airport when bleary eyed.

  24. Using your credit card in ATMs is clearly the most efficient way to get money while travelling aboard. However, to be safe one should carry TWO different credit cards. It has happened to me often that, with no apparent reason, I could not get any cash or the amount I wanted from the ATM (especially in Indonesia and Thailand). A second card is very handy in such circumstances.

  25. @MBH – I don’t know which countries you toured round the Baltic, but Finland, Estonia and Latvia all use the euro and in Lithuania you get nearly central bank rate everywhere as they start using it 1/1/15

  26. Thanks for the Starbucks hint. Out of curiosity what kind of fee does Starbucks charge for the currency conversion?

    In my case I tend to keep 20-30 of currency X. If it’s more than that and it happens to be euros or Swiss francs I trade with coworkers and friends.

  27. I always change money in one direction only on the theory that I’ll return to that country within months. Why pay twice? I also agree that using ATMs is always the best choice. Better rates and just more convenient.

  28. Pretty much doing the same as you Gary. Started using ATM’s years ago in the country I arrive in and keep the cash after leaving since I usually am back there within a year.

  29. I plan ahead and get my foreign currency through my bank (Wells Fargo). They have a service where customers do not pay a service fee for currency purchases and returns. It’s really nice when you arrive in a country and already have the correct $$$ in hand and not have to worry about fees.

  30. Anyone have any good tips on how to manage foreign currency in (gulp) Argentina and (less of a gulp) Uruguay?

  31. I do the same as Gary; however, I also travel with small ziplock baggies that fit into the 5th pocket and that I use to keep change separate and contained. (You can buy tons of them for a few dollars on Amazon.) Later on, it’s easy to grab the respective baggie before a trip. The matter of keeping the currency reminds me somewhat of Back to the Future 2/3, when doc has a briefcase of money from different years. Although I find currency fun, plastic still accounts for most of my transactions, and I am hopeful that BITCOIN will both make exchanging to/from local currency easier, and more obsolete.

  32. I do as Gary does and keep foreign currency for next (hoped for) trips. In Europe, ATM’s give the best rate. Don’t change money here in the US before the trip – bad rates.
    As for Argentina, take all the cash US $$ you think you will use with you. (You’re allowed up to $10,000.00 legally). The bank rate is 8 pesos to a dollar. But you can get up to 14 pesos to a dollar on the black market, OR (great tip coming!) the Western Union at Ceriito 228 (not far from the obelisk). Only at that location, not others, you can get almost the black market rate.

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