The best way to handle money abroad is usually a mix: pay by card where cards are widely accepted, carry some local cash for places that only take cash, and always choose to pay in the local currency when a card machine or ATM offers you a choice. Before you travel, check what your bank charges for foreign payments and cash withdrawals, take two different cards and keep a little backup cash separately. That way you avoid most unnecessary fees and you are not stuck if one card stops working.
Fees on travel money are rarely large in a single payment, but they add up over a trip. This guide explains the general logic behind them, so you can make good choices wherever you are. Fees and rules differ between banks and countries and can change, so always check the details with your own bank.
Card or cash: which is better abroad?
There is no single answer, because it depends on where you go. In some countries almost everything can be paid by card or phone, even small purchases. In others, cash is still common in markets, small shops, local transport, taxis and family-run restaurants. Even within one country, big cities and rural areas can be very different.
A practical approach is to look up the destination before you leave, then watch what locals do once you arrive. Use a card for larger payments such as accommodation and restaurants, where it is safer than carrying a lot of cash, and keep enough local cash for small daily costs. Carrying only a small amount of cash at a time also limits what you can lose.
How do foreign transaction fees and exchange rates work?
When you pay or withdraw money in another currency, the cost usually has two parts. The first is a possible fee from your own bank for using the card abroad or in a foreign currency, sometimes charged as a percentage and sometimes as a fixed amount per transaction. The second is the exchange rate: the rate your bank or card network uses may include a markup compared with the mid-market rate you see in the news or on currency websites.
These costs differ a lot between banks and types of card. Some cards are designed for travel and charge little or nothing for foreign payments, while others charge on every purchase. Read your bank's fee information or ask them directly before the trip, and compare the cards you already have. Cash withdrawals are often treated differently from card payments, so check both.
Should you pay in local currency or in your home currency?
Abroad, a card terminal or ATM may ask whether you want to pay in your home currency instead of the local one. This is called dynamic currency conversion. It looks convenient, because you see the amount in a currency you know, but the conversion is then done by the shop's or ATM's provider, not by your bank, and the rate they offer is often less favourable.
In most cases it is better to choose the local currency. Your own bank then converts the amount, usually at a better rate, even if it also charges its normal foreign fee. If a cashier asks, simply say you want to pay in the local currency. If the screen shows two options, read them carefully, because the wording is not always clear and the home currency option is sometimes highlighted.
The same applies at ATMs. If the machine offers to convert the withdrawal for you or shows a "guaranteed" rate, decline the conversion and continue in the local currency. Look at your receipt or banking app afterwards to see which currency was charged.
How to use ATMs abroad safely and cheaply
ATMs are often the easiest way to get local cash, but they can come with fees: one from your bank and sometimes one from the ATM operator, which the screen should show before you confirm. A few habits help you keep both the costs and the risks low:
- Choose ATMs inside or attached to a bank. They are generally safer and better maintained than standalone machines in tourist areas, and you can ask staff for help if a card gets stuck.
- Use ATMs in daylight and busy, well-lit places. Avoid withdrawing money late at night or in quiet streets, and be aware of who is around you.
- Check the machine for skimming devices. If the card slot or keypad looks loose, bulky or unusual, or something seems glued on, use another ATM.
- Cover the keypad when you type your PIN. Use your other hand or your wallet, and never let anyone "help" you at the machine.
- Withdraw less often, but not too much. Because there may be a fee per withdrawal, fewer withdrawals can cost less, but do not carry more cash than you can afford to lose.
Put the cash and card away before you leave the machine, not on the street. If the ATM keeps your card, contact your bank straight away and block it.
Before you go: your bank, two cards and backup cash
A little preparation at home saves a lot of stress abroad. Before your trip:
- Check whether your bank needs a travel notice. Some banks ask you to tell them where you are going, others rely on their own fraud checks. Ask, so that your card is not blocked as a suspicious payment.
- Check your limits. Find out your daily limits for withdrawals and payments, and whether you can change them in the app.
- Take two different cards. If possible, from different banks or card networks, and keep them in separate places. If one is lost, blocked or not accepted, you still have the other.
- Keep some backup cash. A small amount in a widely accepted currency or in local currency, stored separately from your wallet, helps in an emergency.
- Save your bank's emergency number. Write it down on paper as well, in case your phone is lost too.
If you plan to share costs with a travel companion, for example someone you found on mytripdate who is in the same city on the same dates, agree in messages beforehand how you will split expenses. Look for a verified profile, pay your own share, and never hand over your card or PIN.
Airport exchange, contactless payments and tipping
Currency exchange desks at airports and stations are convenient, but their rates are often less favourable than other options. That is not always the case, so compare the rate and fees before you change money. If you need cash on arrival, it may be enough to change or withdraw a small amount and get more later in the city.
Contactless cards and mobile payments with your phone or watch are widely used in many countries and can be quick and secure. They are not accepted everywhere, though, and the same rule about choosing the local currency applies. Make sure your card works with your phone's payment app before you leave, and keep a physical card with you as a backup.
Tipping customs differ a lot from country to country: in some places a tip is expected, in others it is included in the bill or not usual at all. Look up the local custom before you go. It also helps to keep some small notes and coins, because taxis, markets and small shops may not be able to give change for large notes.
What to do if your card is lost, stolen or blocked
If your card is lost or stolen, freeze or block it in your banking app straight away, or call your bank's emergency number. Check your recent transactions and report anything you do not recognise. Then switch to your second card or your backup cash, and ask your bank whether they can send a replacement or offer other help while you are abroad.
If your card is declined but not lost, the bank's security system may have blocked an unusual payment. Check your app or messages from your bank, or call them. Often the card can be unblocked quickly once you confirm that the payment was yours.
Frequently asked questions
Is it better to exchange money before travelling or abroad?
It depends on the currency and where you exchange it. Compare the rates offered at home and the likely options at your destination. Many travellers bring a small amount and withdraw or exchange more after arrival.
Why does a card machine ask me which currency to pay in?
The terminal is offering dynamic currency conversion. Choosing your home currency usually means a less favourable rate, so choose the local currency in most cases.
Do I need to tell my bank that I am travelling?
Some banks ask for it, others do not. Check your bank's app or website, or ask them directly before you leave.
How much cash should I carry abroad?
Only as much as you need for a day or two of cash-only costs. Keep the rest in a safe place and use cards where they are accepted.
