Money on Arrival: Cash, Cards and Bad Exchange Rates

Airport currency exchange desks exist because tired travellers accept bad rates. Almost everything in this guide is about avoiding that one transaction.

The rate to compare against

Look up the mid-market rate for your currency pair before you land. That is the rate you see in a search engine or a converter app, and it is the number every offer should be measured against.

An airport exchange desk commonly gives 8 to 12 percent worse than mid-market, sometimes more, and the "no commission" sign is not the reassurance it appears to be. The margin is in the rate.

ATMs

Withdrawing local currency from a bank-operated ATM usually gets you close to the mid-market rate, minus your own bank's fees.

Three rules make this work:

• Use ATMs attached to actual banks, not standalone machines in tourist areas
• Decline the machine's offer to convert to your home currency, always
• Withdraw a sensible amount in one go rather than several small amounts, since fixed fees repeat

That second rule is dynamic currency conversion. When a machine or a card terminal asks whether you want to be charged in your home currency, the answer is no. Choosing your home currency lets the operator set the exchange rate, and they set it in their favour, typically by 3 to 7 percent. Always choose to be charged in the local currency.

Cards

Check three things on the cards you plan to use: foreign transaction fees, ATM withdrawal fees, and whether the network is widely accepted at your destination.

Many travel-focused accounts and cards now charge nothing on foreign spending. If yours charges 2.5 to 3 percent, and you are away for two weeks, that adds up to a meal or two.

Carry two cards from different networks, kept in different places. A single blocked card in a country where you know nobody is a bad afternoon.

Tell your bank you are travelling if their fraud system is old-fashioned about it. Many no longer need this, and some will still freeze a card on the first foreign transaction.

How much cash

Depends entirely on the destination. In much of northern Europe and East Asia you can go a week without touching cash. In many other places, taxis, markets, small cafés and rural transport are cash-only.

A reasonable default is enough local cash for the first day - transfer, a meal, a coffee - obtained from an arrivals-hall bank ATM. Then judge the country's habits from there.

Keep a small emergency reserve in a widely exchangeable currency, separate from your wallet.

Tipping and small denominations

Read up on local tipping expectations before you arrive, because getting it wrong in either direction is uncomfortable. Some countries include service, some consider tipping mildly insulting, some depend on it.

Break large notes early. Many taxi drivers and small vendors genuinely cannot change the largest denomination the ATM dispenses.

Keeping it safe

1. Split cash and cards between two places, at minimum
2. Use the hotel safe for the reserve and the passport
3. Enable transaction notifications on your phone
4. Know how to freeze your card in the banking app before you need to
5. Save your bank's international phone number offline

Reclaiming tax

Many countries offer VAT or sales tax refunds to visitors on goods taken home. It usually requires a minimum spend, a form completed in store, and a customs stamp at the airport before you check in your bags. Allow extra time for it, or skip it for small purchases - the queue is often longer than the refund is large.

For managing the whole trip's spending rather than the first hour, see our budget travel guide.