How We Handle Currency While Traveling

Every time we land in a new country, we visit an ATM at the airport to get currency for that country. We start with $100 USD equivalent and go from there, unless we have specific tours or activities that we’re planning to go on that require more currency. Before we leave a country, we spend down or exchange whatever local currency we’ve got left, rather than carrying small leftover amounts from country to country. 

That single habit is how we handle currency while traveling full time for the last 12+ months. This page is the breakdown of how we have handled currency while traveling: what we use, why, and what it actually looks like in practice.

The Short Version

• We withdraw local currency from ATMs using a fee-free debit card
• We never accept the merchant’s or ATM’s offer to convert local currency into US dollars.
• Everyday spending goes on a no-foreign-transaction-fee credit card whenever a place takes cards.
• We keep a second card and a small cash buffer as backup, kept separate from our main wallet.

ATMs Where Possible

Our preferred method of getting cash was to immediately stop at a bank ATM in the airport when we arrived in a new country. This was generally the easiest, as most other travellers are also trying to get local currency for the countries they’re arriving into, especially at international airports. Now sometimes there would be no ATMs available or the ATMs wouldn’t be working, so in that case we would go to a currency exchange counter.

An ATM connected to the actual banking network gives you the real, interbank exchange rate (or something very close to it), and any fee is disclosed as an actual number instead of hidden in a bad currency conversion rate. That’s why it was our preferred method.

For debit cards, we used our PNC bank account. It gave us a refund of $10 per month for ATM fees that other banks would charge, which covered us on a decent amount of ATM fees depending on our travel schedule for that month. There are some other options that provide unlimited ATM fee reimbursement, such as the Charles Schwab ATM card, which could be helpful if you’re looking to specifically get an account that reimburses international ATM fees. Some tips for using ATMs abroad:

1. Withdraw a larger amount less often: Rather than pulling small amounts every couple of days, get larger amounts less frequently. Flat per-withdrawal fees from the local bank (not always your own) add up fast if you’re making frequent small withdrawals. Again, we tried to get $100 USD equivalent as a baseline.
2. Always decline “conversion to USD” : When the ATM screen asks, decline the conversion to USD option. This is Dynamic Currency Conversion (DCC), and it lets the ATM operator set the exchange rate instead of your card network. Always choose to be charged in the local currency.
3. Have multiple debit card options: In some countries we had better luck with Mastercard, and others with Visa, so it helped to have 2 different debit cards on the different networks so that we could try the other one if one didn’t work.

If your bank charges a foreign transaction fee or doesn’t reimburse ATM fees, it’s worth shopping around before a long trip; that fee structure compounds over months on the road in a way it doesn’t on a shorter trip.

Credit Cards Covered Most Things

ATMs handle the cash for markets, tuk-tuks, small guesthouses, tipping, all the places that simply don’t take cards. For everywhere that does take a card, which was more places than we expected, we default to credit over debit. The two reasons that we prefer credit over debit cards: better fraud protection if something goes wrong, and we’re still earning rewards on money we were going to spend anyway.

The one thing you have to make sure of: no foreign transaction fees. A card that charges 3% on every international purchase quietly erases any rewards you’re earning. We go deeper on which specific cards we carry and how we split spending between us on our credit card strategy for couples page. That provides more detail on our credit card strategy, this page is just the “why” behind reaching for plastic instead of cash in the first place.

The same currency conversion question rule applies at checkout as at the ATM: if a card terminal asks “would you like to pay in USD or local currency?” Always choose local currency. The merchant’s USD conversion rate is almost never in your favor.

The Backup

Different countries have better success than others and with so many different countries with different banking systems, it’s essential to carry multiple cards in case one isn’t working. Our setup:

• A second card, physically separate from our primary wallet (different bag, different pocket), so a lost or stolen wallet doesn’t take out our entire ability to pay for things
  • At least one Visa and one Mastercard was helpful
• A small cash buffer in USD, which is still one of the most widely and easily exchanged currencies almost anywhere in the world if every card fails at once. Thankfully we didn’t have this happen but it was reassuring knowing we had the buffer.
• Photos of both sides of every card we travel with, stored somewhere other than our phones’ camera rolls, in case we need card numbers to report a loss.

If you’re planning a longer trip and want the fuller credit card picture, which cards, how we split categories between us, how we think about sign-up bonuses while traveling, that lives on our Credit Cards resource page and in our credit card travel hacking and credit card strategy for couples posts.