- Exchange cash through your U.S. bank or credit union (ideally before you travel) for the best rates and lowest fees.
- Using cards and ATMs abroad can stack foreign transaction fees (often 1%–3%), bank ATM fees (often $3–$5+), and operator surcharges.
- Travel-friendly bank accounts and multicurrency fintechs like Wise or Revolut can cut costs with low-fee conversions, mid-market rates, and fee waivers or reimbursements.
- Avoid airport exchange kiosks, exchange stores, and dynamic currency conversion offers, which typically add large markups.
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The primary article—presumably from NerdWallet—emphasizes that banks and credit unions are usually the most cost-effective option for exchanging currency, particularly if done in advance of travel. It cautions against airport kiosks, exchange houses, and tourist-center converters, which often impose steep fees and less favorable exchange rates. Our additional sources corroborate and quantify the types of fees travelers may face, providing concrete examples and statistics to guide decision-making.
Cost components to watch:
When using ATMs abroad or spending in foreign currency via debit or credit cards, several fees typically apply simultaneously: a foreign transaction fee (often 1%–3% of the transaction), an ATM withdrawal fee if using out-of-network or foreign ATMs (commonly fixed $3–$5), plus any surcharge from the ATM operator itself.
No-fee and travel-friendly accounts:
Some U.S. banks and fintechs waive or reimburse these fees. For example, Capital One 360 and Charles Schwab Bank’s checking accounts charge no foreign transaction fees and reimburse ATM fees; Varo Bank similarly has no foreign transaction fees, though some ATM/ out-of-network fees may apply.
Fintech and multicurrency options:
Platforms like Revolut and Wise provide multicurrency accounts. Wise allows holding balances in 40+ currencies, spending in 150+ countries, and often uses the mid-market exchange rate with low markups. Revolut offers tiered plans, where higher-cost account types offer better margins and more fee-free conversions. Weekend and plan-limit markups can still occur.
Strategic implications:
For overseas travel or recurring international financial transactions, aligning your banking setup with travel-friendly features (zero foreign transaction fees, ATM fee reimbursements, multicurrency balance, refusal of dynamic currency conversion) can meaningfully reduce costs. For infrequent travelers, preordering foreign currency via your bank and avoiding exchange desks at airports may be sufficient steps. Enterprises, banks, and fintechs may see customer retention benefits by offering clearer, travel-friendly foreign-currency fee structures.
Open questions:
• How broadly are zero foreign transaction fee features applied across smaller banks/credit unions?
• What are the actual mid-market markups applied by each provider, especially for smaller fintechs?
• How do dynamic currency conversion practices vary by country or merchant category?
• Are there regulatory risks or sudden rate changes in fintech platforms that could affect trust or cost predictability?
Supporting Notes
- Banks and credit unions typically offer better rates and lower fees than airport kiosks or currency exchange stores.
- Foreign transaction fees charged by many banks are between 1% and 3% of purchase or withdrawal amounts.
- Major U.S. banks often charge a $5 fixed fee for using foreign ATMs plus a variable percentage fee (e.g. Bank of America, Wells Fargo, Chase).
- Some banks, such as Capital One 360 and Charles Schwab, do not impose foreign transaction fees or ATM fees for overseas use.
- Fintechs like Wise offer multicurrency accounts with mid-market exchange rates and lower markups; Revolut’s plans provide thresholds beyond which currency conversion fees start or are reduced.
- Dynamic Currency Conversion (merchant offers to charge in home currency) can include hefty markups—sometimes several percentage points above fair rates—and should generally be avoided.