Should you get foreign currency at home or your destination?

By Carl Dombek

For years, travel experts from Rick Steves to TheTravelPro have recommended a specific way to obtain foreign currency economically. 

Travel writers have long advised people to obtain local currencies from an ATM at their destination for the best exchange rate. I go a step farther and recommend ATMs affiliated with banks to avoid additional service charges that some independent ATMs charge. I have withdrawn cash in many countries without issue.

However, an experience a few years ago made me rethink this practice. 

On the way to our Baltic cruise, I used my debit card at an ATM at Amsterdam's Schiphol Airport and a bank-affiliated ATM in Copenhagen, Denmark. Apparently, my card was skimmed or shimmed because the day of our cruise, some miscreant took €100 from my account at an ATM at the train station in Malmö, Sweden, which is a short train ride from Copenhagen.

When I spotted the transaction upon returning home, I alerted my bank which reversed it pending an investigation and sent me a new ATM card because mine had obviously been compromised.

What happened next is what caused me to rethink this practice.

My bank, one of the major national institutions, said it completed its investigation and determined that the withdrawal was legitimate. I asked them how they could have reached that conclusion because a) my card had never been out of my possession, b) I never authorized anyone to use it on my behalf, and c) we were actually aboard our cruise ship in Copenhagen at the time of the withdrawal. I even provided them an email from the cruise line stating the time we’d boarded.

Long story short, they refused to refund my money until I kicked it upstairs to the president and CEO, who put someone on it. While their conclusion was the same – that the withdrawal appeared to be legit  -- they refunded my money “based on my (long-term) relationship with the bank” and the fact that I'd never made a similar claim.

This time, in preparation for an upcoming overseas trip, I decided to get my foreign currencies from my local bank and accept whatever I spent on fees and less-than-ideal exchange rates as "the cost of doing business."

I spent about US$675 on two different currencies. Had I been able to obtain the best exchange rate as reported by, I would have saved a bit more than $50. However, had I not been able to secure a positive outcome in the scenario above, I'd have lost more than $100. So I'll accept the modest additional expense as the cost of added security.

Use your credit card

Another option is to rely exclusively on your credit card, though you should ensure it is one that does not levy foreign transaction fees.

The manager at my local bank branch recommended that approach. Should an issue arise, the bank simply reverts the questioned charge to the merchant, who then bears the loss. In my case, the bank had to dip into its own coffers, so it was much more stringent about following the "rules".

Withdrawing cash during our Baltic trip provided an excellent basis for comparison. The currencies we obtained from bank ATMs yielded effective rates of roughly $0.16 per DKK, and $1.16 per euro; a good deal compared to other currency exchange facilities but still not as good as simply using our credit cards.

There is one caveat when using your credit card: if you are offered a choice by the merchant - and more and more are doing so -- always choose the local currency and let your bank make the conversion.

Finally, I recommend a specific approach to maximize safety and preserve your options (and sanity) should a card be lost or stolen: take two credit cards issued by two different banks, but only carry one at a time. Keep the other one in your in-room safe. Also, write down the international customer contact numbers for each ATM card and credit card, and keep that list separate from the cards. The list should look something like:
  • SeaFirst National Bank, ATM/debit card, 206-333-1234; MasterCard, 206-321-1234
  • Security Pacific National Bank, ATM/debit card, 213-455-5909; VISA, 213-459-3829.
Do NOT write down the card numbers. If something should happen, the bank will be able to find the card numbers after getting some personal information from you.

Safe and happy travels!

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