Demystifying Foreign Currency Fees

By Robert Sette, CT

July 14, 2019

Although we live in a “global economy”, something as simple as getting cash for foreign travel can be fraught with expensive mistakes… and sometimes we only realize the cost long after the fact. We pay with a swipe of a card, but learn the true cost a month later from our bank statement. After living for a couple of months in Spain and France in 2017 and 2018, respectively, I have come up with some tips for the most economical, fee-minimized approach to international currency matters:

Before I get into details, remember this overall premise: One always loses money on currency exchange and the related fees. Always. Currency exchange is a business, and businesses are created to earn money. There’s nothing wrong, though, with attempting to minimize the costs we incur.

  1. Bring a few bills/coins of the local currency in cash, just in case you need it for a cab from the airport. For Europe, I always try to hold back €25 or so from one trip for my next trip. I used to do the same for CAD when I lived closer to the Canadian border and traveled there more frequently. Generally ATMs are available in/near baggage claim or in the customs area of major airports, but watch out for exorbitant withdrawal fees. Additionally, I have encountered terminals that are under construction, resulting in all ATMs being removed. This happened to me in Barcelona in the Fall of 2017, and I had to use my “emergency” stash of €40 to get into the city. The only other option was an exchange booth with predatory fees, or taking a bus to another distant terminal. Spain at the time did not have Uber or Lyft services in any major city, but I also could have used my credit card in the cab, though that service can be spotty.
  2. Spend US Dollars: In a pinch, in many countries you can spend actual US Dollars at points of sale. Generally they will give you change in the local currency. This is quite common in Canada, even when you are surprisingly far from the US border. I believe it is illegal for businesses outside of the U.S. to give US currency as change in a transaction, though they are allowed to accept it as payment.
  3. Use your debit card for the fewest possible ATM transactions(i.e. get out most of the cash you will need in one transaction). My bank (FirstBank) charges a currency conversion fee (~2.2%) plus $2.50 ATM fee, and there may be a fee for the ATM your are using. If you take out €50 every day, those fees make your trip a lot more expensive. I take out €200-400 initially, depending on the length of my trip, incurring the fees just once. You will generally be subject to the same withdrawal limits as in the U.S. (e.g. my limit is $400/day in the US and €400/day in Europe). At ATMs, it goes without saying to pay attention to your surroundings, be cautions of anyone watching you, and put the cash away as quickly as possible. Leave the bulk of your in a locked suitcase or hotel safe. If you have to carry cash, put it in an inside, zippered pocket of your backpack or purse.

If I am traveling with or meeting friends/colleagues, I have “swapped” leftover currency as our trip winds down and settled up with Venmo or PayPal. It’s a great way to not lose value by converting foreign cash back to US currency, which adds insult to injury.

  1. Use a credit card with no foreign transaction fee. Most Chase, CapitalOne®, American Express® and many other cards have no foreign transaction fee. Call your credit card company to verify and use only cards with no foreign transaction or exchange fees. They add up.
  2. Pay in the foreign currency. When you make a credit card purchase, always select the currency local to where you are when given the chance on the mobile payment device. It is beneficial to have Chase or American Express® do the conversion to dollars, because the services used by merchants and credit card processors do not give you the best exchange rates and they may charge an additional fee. In Europe most servers and shopkeepers will hand the pad to you for this step, however on my last trip in February I had one or two try to tap “USD” for me before handing the pad over so I started to say “en Euros” whenever I handed my card over. It might amount to a few pennies per Euro, but those pennies add up. Also be careful using a debit card in restaurants or shops. Many banks have a per-transaction debit card fee abroad, unlike at U.S. retailers.
  3. Buying foreign currency in advance. Generally I do not advise buying currency in advance, however sometimes circumstances warrant it. All bank and credit union branches have the capability for you to buy foreign currency by debiting your account and they will deliver the currency to your local branch office. In Colorado, FirstBank buys currency from Bank of the West. When I needed a large amount of Euros in advance (for an apartment security deposit), it took just 2 business days for delivery to my local FirstBank branch since the currency was a common one. The exchange rate was not as good as the current published rate, and there was also a flat $20 fee. Overall I found this to be pretty reasonable, for special circumstances.

Large currency notes: Large bills can be problematic in some countries and at small merchants, especially when you want a morning café au lait and a croissant from the local bakery. They may not have enough change. This happens a lot in Russia and former Soviet bloc countries where cashiers possessively guard their change and small bills. I once paid for a fellow student’s breakfast in Moscow because when he tried to use a 500 ruble note (at the time, about $17) in the dorm cafeteria, the cashier said “Nyet” and crossed her arms. No discussion. He had just arrived and had only larger bills fresh from an ATM. I surprisingly had a similar experience one evening in a grocery store in Barcelona. The cashier leaned toward me and looked at the bills in my wallet and said I should use a €10 note. My Spanish is much better than my Russian, so I yelled at him in Spanish for peering into my wallet and told him I wanted to speak to a manager. He sheepishly made change for my €50 note and had plenty left over.


I believe Bank of the West still has international currency tellers at their main branch, which is useful if you are a Bank of the West account holder and happen to be downtown. Call in advance if the currency is the least bit exotic, like Peruvian sols or Russian rubles. There are fees involved, as well as a somewhat inflated (in their favor) exchange rate.

Travelex and similar services are handy for their convenience, but always compare the fees and exchange rates. Also, consider asking a friend or colleague who has recently returned from that country. Perhaps they have a few leftover shekels or pesos they will sell to you.

  1. Currency Exchange Booths. Whether in an airport or elsewhere, this is the absolute worst option. They prominently advertise “No Fees!”, but then their exchange rates are abysmal. I have seen published rates of 1€=$1.20, with an offered rate at an exchange booth of $1.75 or more. They also try to upsell you to exchange/withdraw more currency, but remember that everything you buy with that cash ends up being much more expensive than the prevailing exchange rate.Before I wish you Bon voyage, let me summarize with a few bullet points:
  • Contact your bank and credit card companies and confirm their fees. Get specifics and write them down so you can compare. Only use credit cards with no foreign transaction fees (and perhaps one that earns airline/hotel points also)
  • Make one large withdrawal at an ATM, rather than many small withdrawals
  • Be wary of “No fee” options
  • At the point of sale, buy in the local currency, not US dollars

Robert Sette, CTRobert Sette, CT, is a CTA member living in Denver. He translates Catalan, French, Italian, Portuguese and Spanish into English, and has extensive experience living and traveling abroad (including having lived in Spain/Catalonia, Moscow and France).