How To Exchange Foreign Currency

Tips about conversion rates and money exchange locations

Holding cash

If you will be traveling outside of the United States, it's important to have some local currency for the area to which you are traveling. There are many ways to exchange American dollars for foreign currency, and to convert any leftover foreign currency back to American dollars when you return. Most exchange services will accept cash for conversion to foreign currency, but you can also charge it to a major credit card. Besides obtaining foreign currency through one of these services, you can usually buy traveler's checks, also.

No matter which source you choose, they all work in similar ways. You trade in U.S. dollars for an equivalent amount of another currency. The service calculates the exchange rate and gives you this amount of the new currency. They will either add a set charge to this service or will adjust the rate to include a surcharge. There may also be a shipping and handling charge in some cases.

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When looking for an exchange location, if possible, try to avoid kiosks. They tend to have higher fees .

If you are unfamiliar with the exchange rate in the country to which you are traveling, visit the Federal Reserve Historical Exchange Rate website. Whether you need rates for Canadian dollars or Japanese yen, this site lists the rate over the last six years for 23 different foreign countries, plus the members of the European Union. Remember, when looking for a good rate, you want a low exchange factor when trading from U.S. dollars to foreign currency, and a high factor when you trade foreign currency for U.S.

Calculators and Converters

You can use a currency exchange calculator or converter on the Internet. You can also find a lot of up-to-date information on rates for every country on the Web. Online converters have the advantage of showing constantly updated rates and giving you an opportunity to compare rates between sites. Here are some of the calculators and converters you’ll find online:

foreign currency exchange locations

  • XE has a universal currency converter that uses mid-level rates.
  • Oanda shows current rates as well as historical rates and current trends.
  • Yahoo! Finance offers a converter as well as a pocket guide of exchange rates.
  • offers rates plus information on financial planning and currency trading.
  • International Currency Converter features real-time rates.
  • CNN shows rates, along with interesting articles about world currency.

(If you’re confused by all the currency symbols you see on these sites, you can find a comprehensive list of them at world currency symbols

Foreign Currency Exchange Locations

After you use a calculator, you’ll need to find an exchange location. Use these tips to find the right place:

  1. ATMs. You can opt to get cash from an overseas automated teller machine (ATM) as soon as you arrive at your destination. You will often get a better rate than you might get from other places, as you’ll be getting an interbank wholesale rate. However, you won’t generally know what the rate will be until you perform the transaction. You may be able to get currency for free if your bank has a business relationship with the foreign bank you choose. However, it’s likely that you’ll be charged a fee by the foreign bank as well as one by your regular bank. 


There are some strategies you can follow to keep extra charges to a minimum. Before using the ATM, make sure your card is compatible with the ATM’s system. (For example, look for logos from MasterCard, Visa, Cirrus or Plus.) Also, avoid doing too many transactions, and transactions for small amounts. If you’re going to pay a fee for each transaction, it makes sense to limit them to as few as possible.

  2. Banks. Most banks offer at least a few types of foreign currencies for exchange. The advantage of using a bank is that they are conveniently close to home. You can also exchange your currency the same day, so if you've waited until the last minute, it's not a problem. The biggest disadvantage is that, depending upon your location, the bank may have a lot of currencies on hand or practically none. Because of this, call your local bank branch before you count on fulfilling all of your needs through them.
  3. Airports. Every international airport has a foreign currency exchange counter where you can obtain currency for every location to which flight service is provided. They will also buy back foreign currency when you return from overseas. Although airports are also a very convenient way to exchange money, the rates that they charge can be high.
  4. Online. There are a plethora of websites that offer the option to exhange currency online. Most of them offer quite reasonable rates, but there is usually an additional delivery charge. In addition, you will have to allow from one to five business days for the currency to be delivered. Some websites offer you the option of picking up your currency at a nearby location to avoid the delivery charges. Two of the most popular websites are Travelex Worldwide Money and Wells Fargo Foreign Exchange Services. Wells Fargo has a rate calculator to help you figure out how much your cash is worth in another currency as well.

One factor to consider when you're getting ready to travel is how the exchange rate fluctuates. If you have a very favorable exchange rate before your departure, you may wish to estimate how much local currency you will need for the entire trip and exchange it all at once. On the other hand, if the rate is very unfavorable and you think it may improve while you're abroad, change just enough money for the first few days of your trip and then convert the rest of your money after you arrive. Since rates are always changing, it’s useful to have access to a calculator.

If you can’t find a convenient location, one of the most important strategies is to take currency in a variety of forms, including cash, credit cards and traveler’s checks. This will help cover your money needs if one of your payment methods, such as an ATM or credit card, doesn’t work in a foreign country.


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