Every time you exchange currency, you’re paying one or more fees. Do it the smart way and you can save enough to buy a nice dinner. If you’re more casual about exchanging currency, well, you’re going to pay.

In general, banks give you the best rates when you’re buying foreign currency. However, you may want to shop around to see whether you can do better at companies that specialize in foreign exchange.

If you’ve left it to the last minute and now you’re at the airport with no foreign currency, you’re stuck with the currency exchange booths there. You will pay a hefty premium of at least a few percentage points for that convenience. Why so much? Well, they know you don’t have a choice so they charge what the market will bear. Secondly, rent at the airport is super expensive, which is why the convenience stores sell $4 bottles of water.

It’s easiest by phone. Call your bank first. It’s important to tell them how much you want to buy, because sometimes the posted rate is only for large transactions, say of $100,000 or more.

Don’t ask for a rate, where you’ll have to do the math yourself. Ask for a dollar amount. How much will this cost you? Say you’re going to Europe and you want to buy 500 Euros. Ask specifically what 500 Euros will cost on that day, with all fees included.

On the same day, call a foreign exchange company and ask for the same thing.

Don’t count on a bank having all foreign currencies on hand. Sometimes they have to order them. Even getting Euros can take a few days, and less popular currencies a week or more.

If you have accounts at more than one bank, try them all. (Generally, you need an account to use the bank’s foreign exchange service.) You may be surprised at the difference in your quote. Recently, Canada’s seven leading banks had markup rates that ranged from 2.10% (HSBC) to 3.34% (CIBC). That’s a 60% difference. This markup is hidden but you’ll see the difference when they give you the quote. Deal with the bank that gives you the best rate.

That really depends on where you’re going. In many countries, cash is king. You may be surprised at which countries are less friendly to credit cards. Germany really likes cash and you’ll find many shops and restaurants won’t accept cards. Meanwhile, neighbouring Denmark is working to become a cashless society.

It also depends on what type of shopping you plan to do. Big department stores, international brand stores and high-end restaurants will all accept cards. But if you like going to markets, festivals, mom and pop stores and smaller local restaurants, you better have cash.

For shorter trips, I try to take as much money as I think I’ll need for the whole trip. If you have to use an ATM, go into a branch of a major bank and exchange a substantial amount. Remember, you’re paying two fees every time you do a transaction, one to the foreign bank and another to your bank. So, avoid doing a series of small transactions. The fees add up.

A note of caution using ATMs – try to do it indoors where you’re less likely to be watched, and use a major bank, not one of those no-name independent ATMs you see in variety stores or bars. Some of them are very sketchy (card readers that steal all your information) and charge ridiculous fees.

Some banks are now part of international alliances that reduce fees a bit. For example, Bank of America belongs to the Global ATM Alliance. Use one of their branded ATMs and you avoid the foreign bank usage fee, but still pay an international transaction fee of 3%. You’ll find any of your bank card alliances on their website.

Some countries such as Panama have made the U.S. dollar their official currency, so if you’re American, you don’t have to worry about exchange. Barbados readily accepts U.S. dollars and has locked their exchange rate to $2 Barbadian to $1 American.

However, other countries unofficially accept U.S. dollars. That’s where it’s better to pay with local currency, since it’s highly unlikely you’ll get a good exchange rate.

Did you know that most credit cards add 2.5% to the exchange rate when you use it in a foreign country? Read the fine print in your agreement, it’s in there. They don’t break it out on your bill, it’s just buried into the amount. So, if you’re going on shopping binge, say to the January sales in Paris, that could be a substantial amount. Same goes for hotel bills or car rentals that you book outside of your country.

For foreign spending, you want to carry a credit card with no foreign exchange fee. You’ll have to look for them since they’re not heavily advertised. In the U.S. you’ll find these cards offered at Capital One, Citi and Chase. In Canada, Chase has shut down these cards, but I found a VISA at Home Trust. I only use it outside of Canada, since it’s a bare bones card with no loyalty points or insurance offerings.

When we travel, I do take a couple of other credit cards with me, in case there are any issues with the Home Trust card. To date, I haven’t had to use them.

Occasionally, I’ve gotten a message on the credit card machine offering me the choice to pay in the local currency or my home country currency. If you see that, always choose local. That way you get the exchange rate your credit card offers. If you choose your home currency, they do the transaction at a rate of their choosing. That’s not likely a good deal for you.

Say we’re going somewhere in Europe for 10 days. We’ll budget €50 cash per person per day. About a week before we leave, I’ll go to my bank’s website and order €1,000 which they will deliver to my local branch. We each have our Home Trust VISA cards. Then we’ll just keep an eye on the cash, knowing that we’ll need some for the last day to get to the airport and any incidentals.

For longer trips, we try to plan it so that we only have to use a foreign ATM once part way through the trip to cover us for the rest of the journey.

We’d rather come home with extra Euros than make small withdrawals because we didn’t plan well.

We’ve all read the pickpocket stories in cities like Rome, Paris and Barcelona. I know a lot of guys like their wallets in their back pocket. That’s just not safe.

For years, I’ve carried a simple money clip in my front pocket. In that clip, I’ll have a couple of credit cards and cash for the day. Nobody will pick pocket that, and worst-case scenario, if we get held up (never happened, touch wood), I lose only what I have on me. I’ll leave the rest of the credit cards and cash back in the room, either in the hotel safe, or well-hidden inside our rental apartment.

Women should carry their purse with a cross-body strap, holding the purse in front of them so it can’t readily be snatched from behind.

Wherever you go, don’t carry all of your cash and cards with you. And don’t carry your passport unless you know you’ll need it. It’s much safer in your hotel room.

So, that’s it. Get the cash from your bank, get a no exchange fee credit card and don’t carry everything you have with you every day.

If you have any thoughts on this or any tips that work for you, please leave them in the comments below.

Travel Resources

There’s nothing like having WiFi wherever you go. We rented a Teppy portable WiFi and carried it with us everywhere. With a Teppy, you can connect your phones, tablets, laptops and gaming consoles just like you connect to WiFi at home.

Use the apps on your phone including your favorite GPS apps without paying expensive cellular service fees.

It’s also perfect for uploading pictures, sending emails or just web browsing. We also used it for online work on the road including web updates and social media.

Teppy portable WiFi works around the world. Try it on your next trip.

For hotel accommodation, we like Booking.com. Photographs show off the properties, and real reviews help you choose the hotel that’s best for you. You’ll find a great selection, current prices and pages that make booking easy.

Remember, the world’s most popular destinations and can get very busy, so book early to get the best selection and price.

Click here, and you’ll get $25 off your next reservation on Booking.com.

We’ve also rented Airbnb throughout USA and Europe. We wrote an article about renting Airbnb, 12 Tips for a Great Renting Experience to help you make the right decision. If it’s your first time renting Airbnb, click here to get the equivalent of $50 CDN off your first booking.

Along with the websites and other travel planning tools, we still like to have a guide book handy. We’ve tried them all, and these days we prefer Lonely Planet books.

Use our link to get 10% off your total order when you enter EARTHTRIPPERS10 during checkout, where it asks for the Discount Code. Please note, this offer is valid only in USA and Canada.

These days there are many things that can happen when you travel, aside from getting bumped from a flight. That’s why we always get insurance for our trips. It covers damage, loss or theft of our belongings, health issues and if necessary, emergency evacuation. Better safe than sorry.

Whether you’ve just booked your trip or are already underway, you can get covered by World Nomads. It’s one of the most popular insurance companies designed specifically for travellers. See if it’s right for you.

Everything you need to know about renting a car in Italy. Read it before you go. Could save you a fortune.

Venice for 11 days just for photography? How did it go? (Hint: Wasn’t enough time, believe it or not!)

Thoughts before taking an 11-day photo trip to Venice. Would it be worth it? Would I enjoy it? Yes and yes…

Read about the exceptional week we spent in Venice in September – including opera at La Fenice.

Join us in learning about Mariano Fortuny, a true renaissance man of Venice, and make sure you visit his palazzo.

Read about the extraordinary kindness from Italians we experienced every day in Italy.

Take advantage of our Top 5 Tips for visiting the Vatican, Sistine Chapel and St. Peter’s in Rome.

This account of Monticchiello, a small Italian hilltop village, will open your eyes to its history and brush with annihilation.

We planned to go to Cinque Terre, but didn’t. Why not?

Note: Some of the links on this page are affiliate links. If you click on them and buy something or book accommodation, we receive a small commission at absolutely no cost to you. This helps with the cost of operating this site.