Money abroad · 7 min read
How to exchange money for travel and get the best rate
Exchanging money is one of those small travel jobs that quietly costs you more than it should. Get it wrong and you can lose 8 to 12% of every euro before you have even bought a coffee. Get it right and the difference between a good rate and a bad one on a €1,000 trip is real money, often €80 to €120 you could have spent on the trip itself. Here is how the numbers actually work, and how to keep more of them.
Know the mid-market rate first
The mid-market rate, sometimes called the interbank rate, is the real exchange rate. It sits exactly halfway between the buy and sell price that banks use to trade with each other, with no markup added. It is the number you see on Google or in a currency app when you type "10 euro to Thai baht". Nobody at a counter will give you exactly that rate, but it is your benchmark. Every deal you are offered should be measured against it.
Before you travel, look up the mid-market rate for your destination and note it down. If €1 is worth 39 baht at mid-market, and a bureau offers you 34, you now know their markup is about 13%. That single check turns a vague feeling of "this seems fine" into a number you can judge.
The spread is where they make their money
The gap between the mid-market rate and the rate you are actually offered is called the spread. It is baked into the exchange rate, so it does not show up as a separate fee, which is exactly why it is easy to miss. A place can shout "0% commission" in the window and still take a fat spread on every note it hands over.
So ignore the word "commission" and do the arithmetic. Ask how many units of local currency you get for a fixed amount, say €100, then compare that to what €100 should be at mid-market. Two bureaus 50 metres apart can differ by 6 or 7%. The one with the flashiest sign is rarely the cheaper one.
Airport and hotel bureaus are the worst deal
Airport exchange counters know you are tired, you have just landed, and you feel like you need cash right now. They price accordingly. Markups of 10 to 15% against the mid-market rate are normal, and at some airports the spread is worse than that. Hotel front desks and the little exchange shops right next to major tourist sites sit in the same bracket.
If you genuinely need a small amount of local cash the moment you land, for a taxi or a train ticket, take out just enough to get to your accommodation and no more. Change the rest later at a bank in town, or skip the bureau entirely and use an ATM. Never change your whole trip budget at the airport. That is where the biggest losses happen.
Tip
Log every expense in the local currency
PocketTrip records what you spent in the local currency and converts it back to your home currency, so your budget reflects the real cost including the rate you actually got.
Cards versus cash: use both, on purpose
The cheapest way to spend abroad in most countries is a card that charges no foreign transaction fee and passes through close to the mid-market rate. A lot of travel-focused debit and credit cards now do exactly that. Tap to pay for meals, tickets and shops, and you avoid carrying a wallet full of notes you will struggle to spend down before you fly home.
Cash still matters, though. Markets, small cafes, tips, rural areas, taxis and countries where card acceptance is patchy all run on notes and coins. A rough plan that works for most trips:
- Card for the big and the everyday: accommodation, restaurants, museums, supermarkets, anywhere with a terminal.
- Cash for the small and the informal: street food, local buses, tips, market stalls, entry fees at tiny sites.
- A backup card kept somewhere separate, in case one gets blocked, lost or eaten by a machine.
When to withdraw local currency, and how much
An ATM in your destination almost always beats a home-country bureau, because you get a rate very close to mid-market. The catch is fees. Your own bank may charge a foreign withdrawal fee, and the local machine may add its own on top. Because those fees are often flat, say €3 to €5 per withdrawal, lots of small withdrawals are expensive per euro while a few larger ones spread the cost thin.
So if you need cash, take out a sensible chunk at once rather than tapping the machine every day. On a week in, for example, Vietnam or Turkey, one or two larger withdrawals usually beat seven small ones. Just do not overshoot: leftover foreign cash converted back home gets hit by the spread a second time, so aim to land with only a little left over.
Two more things to watch at the machine. Decline any offer to "convert to your home currency" on screen, and always choose to be charged in the local currency (more on that next). And use bank-operated ATMs where you can. The standalone machines in tourist zones, often bright and conveniently placed, tend to hide the steepest fees.
Always pay in the local currency
When you pay by card or use an ATM abroad, you will often be asked whether you want to be charged in euros or in the local currency. Choosing euros feels safer because you see a familiar number, but it triggers something called dynamic currency conversion, where the merchant's bank sets the rate and adds a markup that can run 3 to 8%. Choosing the local currency lets your own card do the conversion, which is nearly always cheaper. The rule is simple: whatever country you are standing in, pay in that country's money.
Small amounts versus large amounts
How much to change up front depends on the trip. For a short city break where cards work everywhere, you might carry the equivalent of €50 to €100 in cash and put everything else on a card. For a longer trip, or somewhere cash-heavy, plan a rough daily cash figure and withdraw against it in a couple of batches rather than one giant lump at the start. Carrying a huge wad of notes is a theft risk, and it locks your money into one currency at one rate. Withdrawing as you go keeps you flexible and spreads any rate movement over the whole trip.
The figures above are ballpark guides to give you a feel for the scale, not promises. Rates and fees move constantly and vary by card, bank and country, so treat them as a starting point and check the live numbers before you travel.
Keep the real cost visible while you travel
None of this helps if you lose track of what you have actually spent once the currencies start mixing. That is the part PocketTrip handles: log each expense in the currency you paid in, and it converts everything back to your home currency so your budget stays honest. You can see how much a country is really costing you, split shared bills with friends, and scan receipts so the amounts fill in themselves. Everything stays private on your device, synced through your own iCloud on iPhone and iPad and backed up to your own Google account on Android. If you are juggling several currencies on one trip, our multi-currency travel budget guide goes deeper, and the wider travel budgeting guide ties it all together.
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Keep reading: How to save money while travelling without missing out →