Key takeaways
- Currency exchange options have expanded, but knowing best practices helps you avoid costly misconceptions.
- While many airport exchanges charge high fees, newer automated kiosks offer more competitive rates.
- Modern ATM networks and bank partnerships make advance currency exchanges less necessary than before.
- Understanding how bank partnerships affect exchange rates can help save you money.
Currency exchange myths cost travelers billions each year in unnecessary fees and poor exchange rates. While conventional wisdom suggests avoiding airport kiosks and always paying in local currency, the reality in 2025 looks different.
From automated exchange systems offering competitive rates to evolving bank partnerships affecting ATM fees, many long-held beliefs about getting the best deal on foreign currency no longer apply.
The most common money exchange misconceptions
Some misconceptions about currency exchange have never been accurate, while others have evolved over time. Here are some of the most common beliefs that deserve a closer look.
Airports are the worst place to exchange money
Airport currency exchanges have long had a reputation as the most expensive option for travelers. While traditional airport kiosks still charge premiums of 8–10 percent above market rates, major hubs now offer automated exchange systems that beat many bank rates.
At London’s Heathrow and Frankfurt’s terminals, new digital kiosks provide rates within 2–3 percent of interbank rates — significantly better than the 5–7 percent markup at traditional exchange counters.
The key difference? Operating costs. Automated systems handle thousands of transactions daily with minimal overhead, allowing airports to offer more competitive rates.
‘Pay in your home currency’ is a convenient choice
That helpful prompt at European card terminals asking if you’d like to pay in dollars? It’s actually costing you money. Dynamic currency conversion adds 3–4 percent to every transaction, despite showing you the “exact” amount in dollars. Major retailers and hotels particularly push this option, but declining it saves you real money on every purchase.
A quick coffee and pastry for €8 jumps from about $8.60 to $8.90 when choosing dollars instead of euros. Small differences add up across a trip, especially at hotels and restaurants where this option appears most frequently.
You must pre-order currency for the best rates
Pre-ordering currency from your bank used to be standard travel advice. In 2025, ATM networks and digital payments have changed this calculation. While getting some starter cash makes sense — enough for a taxi and first meal — carrying large amounts of foreign currency rarely does.
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.
Exchanging currency is inherently risky
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.
Cash, cards and digital payments abroad
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.
Modern exchange services and apps
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.
Business vs. personal exchange strategies
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.
Quick tips for understanding money exchange
- 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.
Bottom line
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.
Frequently asked questions
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