Q:

How do you get the best rate when exchanging foreign currency?

A:

Quick Answer

Buying foreign currency with an ATM card or a credit card and using banks or post offices in the destination country are ways to get the best rate when exchanging foreign currency, reports Independent Traveler. American Express offices, especially when using their traveler's checks, are another viable option.

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How do you get the best rate when exchanging foreign currency?
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Full Answer

It is useful to research exchange rates before departing, Independent Traveler suggests. Knowing current rates helps to determine whether or not rates offered at the destination are fair. Using an ATM with an international network, such as CIRRUS, provides accountability, according to USA Today. Withdrawals from an airport ATM or an ATM within a bank are usually reliable. As of 2015, it is necessary to change alphanumeric PINs for ATM cards to numeric PINs, as few foreign ATM machines can process alphanumeric PINs.

ATM cards and credit cards typically get better rates when used to buy foreign currency via interbank exchanges, sometimes 2 to 7 percent better than rates associated with exchanging cash for traveler's checks, claims Independent Traveler. It is potentially cheaper to use credit cards for all major purchases, as some U.S. credit card companies don't charge fees for transactions in foreign currencies.

When exchanging cash for traveler's checks, it can be less costly do so in the destination country. Exchange bureaus located in touristy hubs, train stations and airports kiosks can be more expensive.

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