The Best Way to Convert Currency Without Losing Money
The best way to convert currency without losing money comes down to knowing what the real exchange rate is and avoiding the handful of common traps that quietly add fees on top of it. Our currency converter shows the live mid-market rate for any pair of currencies, which gives you a baseline to compare against whatever rate you're actually offered.
Understand the mid-market rate first
The mid-market rate is the midpoint between what buyers and sellers are willing to trade a currency for on the global market, and it's the rate you'll see quoted in news headlines and on the currency converter. Banks, exchange kiosks, and card networks almost never give you this exact rate. Instead they add a markup, sometimes called a spread, on top of it, and that markup is where most of the money gets lost in a currency conversion. Checking the mid-market rate before exchanging money gives you a number to compare every offer against.
Avoid airport and hotel exchange counters
Currency exchange kiosks in airports and hotels consistently offer some of the worst rates available, often with a markup far above what a bank or ATM would charge. They rely on captive customers who need cash immediately and don't have time to shop around. If a trip is planned in advance, exchanging even a small amount of cash before leaving, or withdrawing from an ATM after arrival, is almost always cheaper than an airport counter.
Use a card with no foreign transaction fee
Many credit cards charge a foreign transaction fee, typically around 3 percent of the purchase amount, every time you use the card abroad. A number of cards, particularly travel-focused ones, waive this fee entirely. Checking your card's terms before a trip, or applying for a no-foreign-fee card in advance, avoids paying that percentage on every single purchase for the duration of a trip.
Decline dynamic currency conversion
At many overseas card terminals and ATMs, you'll be asked whether you want to be charged in your home currency or the local currency. This is called dynamic currency conversion, and it almost always uses a worse exchange rate than your card issuer would apply. Choosing to be charged in the local currency instead lets your bank or card network handle the conversion at their rate, which is typically closer to the mid-market rate than whatever the merchant's terminal is offering.
Withdraw larger amounts less often at ATMs
ATM withdrawals abroad often come with a flat fee per transaction, on top of whatever fee your own bank charges for a foreign withdrawal. Making fewer, larger withdrawals instead of many small ones spreads that flat fee across more cash, lowering the effective cost per dollar or euro withdrawn. It's worth checking your bank's foreign ATM fee structure before a trip, since some banks reimburse these fees while others don't.
Be cautious with rate-lock and prepaid travel cards
Prepaid travel cards and rate-lock services let you buy currency at today's rate for use later, which can help if a currency is expected to weaken. For most everyday travel amounts, though, the fees and rate markups built into these products often outweigh whatever protection they offer against rate movement. Comparing the total cost, including any loading fees or inactivity charges, against simply using a good no-fee card is usually worth the few minutes it takes.
Compare the total cost of each option
A slightly better exchange rate paired with a high flat fee can end up costing more than a slightly worse rate with no fee, especially for smaller amounts. Before exchanging or withdrawing money, it helps to work out the total cost in your home currency for the amount you actually need, factoring in every fee involved, rather than comparing rates alone. Running both the offered rate and the current mid-market rate from the currency converter side by side makes that comparison quick.
Frequently asked questions
What is the mid-market exchange rate?
The mid-market rate is the midpoint between what buyers and sellers are willing to trade a currency for on the global market. It's the rate quoted in news and currency converters, and banks or kiosks almost always charge a markup on top of it.
Should I choose to be charged in local currency or my home currency abroad?
Choose the local currency. Being charged in your home currency at a foreign terminal or ATM triggers dynamic currency conversion, which typically applies a worse exchange rate than your own card issuer would.
Are airport currency exchange counters a bad deal?
Generally yes. Airport and hotel exchange kiosks consistently apply some of the largest markups on the exchange rate, since they serve travelers who need cash immediately and have little opportunity to compare rates.