Common misconceptions about currency exchange

Major U.S. banks now partner with specific ATM networks abroad thanks to the Global ATM Alliance. Banks like Charles Schwab reimburse all ATM fees worldwide. These partnerships typically provide exchange rates within 1 percent of interbank rates, beating most currency exchange services.

There are plenty of travel horror stories about currency exchange, which can deter travelers from getting the cash they need. However, when you examine these stories closely, many scams can be avoided with preparation and common sense.

Some of the most famous currency exchange scams to watch for include:

• Sleight of hand: Independent money exchangers may cause a distraction to short-change you. Always count your cash when you receive it.

• The “helpful” stranger: In places where your native language isn’t spoken, beware of strangers offering to help you exchange money, especially if they want you to follow them.

• Aggressive money changers: Be cautious of shop owners and kiosk managers who use high-pressure tactics to convince you to exchange money with them. Legitimate money exchange professionals won’t pressure you.

As long as you work with reputable money exchange services and do your research, you’re much more likely to have a seamless currency exchange experience.

Digital payments dominate European shopping districts, but cash still rules in many local markets and smaller towns. Major cities embrace Apple Pay and Google Wallet, particularly in Scandinavia where even street vendors use digital payments. Yet travelers relying solely on cards may find themselves stuck at cash-only restaurants in Rome or unable to pay for taxis in parts of Spain.

The real advantage comes from mixing payment methods. Credit cards with no foreign transaction fees handle major purchases, while pulling cash from in-network ATMs covers smaller transactions. Digital wallets add convenience but shouldn’t be your only option — even tech-forward cities like Stockholm keep some businesses cash-only.

Financial technology has reshaped currency exchange, but not always for the better. While apps promise “no fees,” they often hide costs in exchange rate markups. Traditional services like Western Union now compete with Wise and Revolut, each offering different advantages:

• Traditional exchange services provide instant cash access but typically charge 3–5 percent above market rates through their markup and service fees.

• Digital transfer apps like Wise offer rates within 0.5 percent of interbank rates but require advance planning and bank transfers.

• Multi-currency accounts from Revolut and similar services provide nearly instant exchanges but may limit monthly transaction volumes.

• Bank-issued travel cards combine exchange services with fraud protection, though they often carry annual fees.

Big companies lock in exchange rates months ahead for a fraction of what tourists pay. American Express charges business clients 0.5 percent for forward contracts that freeze today’s exchange rate for future payments. The same bank charges vacation travelers 3.5 percent for standard currency exchange.

The numbers get worse for smaller amounts. Corporations moving $50,000 between currencies pay about $250 in fees. A tourist exchanging $5,000 pays $150 to $200 at most banks. Even premium credit cards with “no foreign transaction fees” build about 1 percent into their exchange rates.

Some business perks sound tempting — like Bank of America’s zero-fee currency trades for corporate accounts. But these require keeping $100,000 or more in business checking accounts. For travelers, straightforward options like Schwab’s ATM card or Capital One’s no-foreign-fee credit cards beat trying to game corporate banking rules.

• Location matters less than timing and method. While conventional wisdom suggests exchanging money at your destination, the best rates often come from U.S. banks that partner with foreign institutions.

• Bank of America’s relationship with Barclays in the U.K. and BNP Paribas in France means its customers get preferred rates and zero ATM fees at partner locations.

• Most European bank ATMs now offer nearly identical exchange rates — usually within 0.5 percent of each other. The real cost difference comes from your home bank’s international fees.

• Capital One and Charles Schwab refund all ATM fees and charge no foreign transaction fees, while most traditional banks charge withdrawal and foreign transaction fees.

Forget old advice about currency exchange — the rules have changed. Bank partnerships matter more than exchange rates in 2025. Charles Schwab and Capital One still refund all ATM fees worldwide. Major banks charge $10 to $15 per foreign withdrawal plus 3 percent on exchanges. That’s $50 in fees per $1,000 exchanged.

Be careful with airport kiosks. If you choose to use or need quick cash, make sure to use one of the automated, verified Travelex kiosks that don’t charge hefty commissions on top of the exchange rate. Consider ordering currency from your bank before departure or pick a credit card that gives bank exchange rates with no markup.

• What’s the biggest misconception about currency exchange rates?

  Many travelers think all banks offer similar exchange rates. In reality, rates can vary by up to 5 percent between banks, and online banks typically offer better rates than traditional branches. Compare rates between three or four banks before exchanging large amounts.

• Do I need to exchange money if I have a credit card with no foreign fees?

  While credit cards offer convenience, relying solely on plastic is risky. Many restaurants in Europe, markets in Asia and local vendors worldwide still operate cash-only. Keep enough local currency for transportation, small purchases and emergency backup.

• Why do currency exchange rates at banks differ from Google’s rates?

  Google shows the interbank rate — what banks charge each other. No consumer gets this rate. Banks add markups between 1 percent and 4 percent, depending on your account type and relationship. Online currency services usually charge less markup than traditional banks but may have longer processing times.