The cheapest ways to get foreign currency when you travel

Getting foreign currency for a trip used to mean a visit to the bank and a wad of traveler's checks. Now there are more options, and they vary a lot in cost. The difference between the cheapest and most expensive ways to pay abroad can easily be five to ten percent of everything you spend. Here's how the main options compare.

The benchmark: the mid-market rate

Every option below is priced relative to the mid-market rate, the rate this converter shows. None of them will give you exactly that rate, but the closer you get, the less you're paying. It's worth knowing roughly where the rate sits before you travel, so you can spot a bad deal.

Cards: usually the best option

For most travelers, paying by card is the cheapest way to spend abroad. Visa and Mastercard convert at rates close to mid-market. The main cost is your card's foreign transaction fee, often around 3 percent, although many travel-focused credit cards and some banks charge nothing at all.

• Check whether your card charges a foreign transaction fee before you go. Switching to a no-fee card for the trip is one of the easiest savings available.
• Always pay in the local currency when a terminal gives you the choice. Choosing your home currency triggers dynamic currency conversion, which usually costs more.
• Tell your bank you're traveling if it requires notice, so your card isn't frozen for suspicious activity.

ATMs: the best way to get cash

When you need cash, a bank ATM in the country you're visiting is usually cheaper than exchanging money. You'll get close to the network rate, although you may pay a fee to your own bank, a fee to the local ATM operator, or both.

• Withdraw larger amounts less often if you're charged a flat fee per withdrawal.
• Decline the ATM's offer to convert the amount for you. Choose to be charged in the local currency.
• Use ATMs attached to real banks where possible. Standalone machines in tourist areas often charge higher fees.

Currency exchange counters

Exchange counters vary enormously. Airport and hotel counters are generally the most expensive, since they're convenient and the customers have few alternatives. City-center exchange shops in competitive areas can be much better, sometimes very close to the mid-market rate, especially in cash-heavy destinations. Watch for "zero commission" signs: the cost is usually built into a worse rate rather than charged as a fee.

To compare, work out how much local currency you'd receive for a fixed amount, then check that against what the converter says. The percentage difference is what you're really paying.

Ordering currency before you go

Getting a little local currency from your bank or a currency service before you leave can be handy for a taxi or snack on arrival. Rates are usually worse than an ATM at your destination but often better than an airport counter. For most trips, a small amount is plenty.

Prepaid travel cards and multi-currency accounts

Prepaid travel cards let you load money in advance and sometimes lock in a rate. Multi-currency accounts from fintech providers let you hold and spend several currencies, often at rates close to mid-market. Both can work well, but check the fees for loading, spending, withdrawing, and inactivity, which vary widely between providers.

A simple plan for most trips

1. Carry a card with no foreign transaction fee, and a backup card on a different network in case one isn't accepted.
2. Pay by card in the local currency wherever it's accepted.
3. Use a bank ATM on arrival for the cash you need, and decline any conversion offer.
4. Keep airport and hotel exchange counters for emergencies only.
5. Check the rate with the converter so you know what a fair deal looks like.