Taking out cash in a foreign country is as easy as it’s every been. Decades ago, the only way to get foreign currency was to purchase it prior to travel. Your bank handled the details, took a cut, and then you had money.
Travelers checks were also a thing, once upon a time. Travelers purchased these from their bank, in varying sums, and since a signature was required, it was considered safer than taking thousands in cash. Withdrawing from an ATM was expensive and sometimes outright impossible, depending on where you were. Purchasing foreign currency took some forethought, a cash reserve, and an idea of budget.
Now, most frequent travelers treat cash withdrawal as an afterthought. Still, there are some important things to keep in mind and some pretty precarious problem areas.
Question: What’s the best way to get foreign currency?
My wife and I are traveling to London and Paris for a week around Christmas. Some of our friends said that the best way to get foreign currency is to go to our bank and get it, but our son said it’s easy to get it from an ATM. What is the best, and cheapest, way to get foreign currency in Europe?
Thank you, Mike
Answer: Take a little bit with you, then withdraw from an ATM
Hi Mike, thanks for your question. Both of your sources are right, but I want to expand on the purchasing factor. In general, since you’re going to two first-world destinations, withdrawing from an ATM is easiest. Buying British pounds and Euros in advance makes little sense, unless you want some on arrival and don’t want to visit an airport ATM. (They typically have higher transaction fees than a city ATM.)
My go-to is to withdraw €60 or £60 on arrival, use it for a taxi, and then withdraw more once I am at my hotel. If I know I can use my credit card without penalty (which is where those amazing credit cards with no foreign transactions fees are great!), I may not even bother with a ton of cash.
When you need a small amount of cash, the best type of ATM to look for is either one you home bank offers abroad, or one that your home bank partners with. There’s a better chance of a lower fee (or none at all) from one of these. I tend to stick with the major international bank in whatever country I am in.
We also suggest checking with your bank to learn if your debit card has an ATM fee rebate policy. Charles Schwab refunds all ATM fees, for example. While a debit card is less secure than a credit card, you can use it for withdrawing small amounts at an airport.
Using A Foreign ATM
ATMs work the same in all countries. The main screen will almost always offer an English language choice. You’ll input your pin and then select the amount you want to withdraw. There’s always a notification about the ATM fee (usually €/£3 or so) and a message that your bank may charge an additional fee. Accept these, and your cash will spit out. Don’t forget to grab your card.
Safety at a Foreign ATM
I hate to bring it up, but there are sometimes scams at ATMs. Be cautious of anyone loitering near you and if you feel insecure, don’t use the ATM.
When in the city, I always choose one that is connected to a bank building, and I rarely go at night. (I say rarely because I will stop if it is a busy street and there is a light.) One basic method of fraud prevention is to wiggle the card slot on the ATM. Tampering is more common in some countries than others, and giving the card reader a good shake can reveal a shoddily tampered card scanner that might be waiting to steal your card information.
Be especially wary of someone offering to help you use the ATM. No one needs to help you use an ATM that is in English, and no Good Samaritan will offer.
Purchasing Foreign Currency in Advance
Purchasing foreign currency in advance is highly convenient, but it is also not often as cost-effective as withdrawing from an ATM. Commission fees and not-awesome exchange rates eat into your money, and you end up with less cash than you would at an ATM.
There are some instances, though, in which you should consider purchasing foreign currency in advance. Mike and his wife are going to Western Europe, so they’ll have no problems finding an ATM. However, travelers heading off the beaten track, to Central Asia, for example, or certain places in Africa or the Pacific, should check with their bank about buying enough currency to last while they are there. Be aware that there are restrictions on how much cash a person can bring into (and out of) a country, so don’t plan on taking $10,000 through customs.
A few reputable companies that offer currency services include Travelex, AAA and Wells Fargo. Your local bank or credit union might also offer this service, so if you have time before you travel, check with your local bank.
Regarded as one of the best places for purchasing foreign currency, Travelex is found in brick-and-mortar locations as well as online. Store pick up is free if you order online, while you’ll have to pay a shipping fee to get anything less than $1,000 delivered.
AAA also offers the choice of purchasing foreign currency online or in store. They also offer a AAA Visa TravelMoney Card, which is a preloaded, reloadable, debit card optimized for travel.
Wells Fargo offers foreign currency purchase for account holders. However, AAA goes through Wells Fargo, so if you’re doing research you can check the rates that Wells Fargo offers before making a decision.
The general consensus from travelers is to avoid purchasing foreign currency while at home*. If you must, only purchase enough to get you through the airport and into the city – at which point you can find an international ATM. *Unless you are going to a destination where getting cash is difficult or impossible!
Mike, I hope I’ve answered your questions about purchasing foreign currency. Have a safe and enjoyable trip to London and Paris this festive season!
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