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Travel

How to Sidestep Currency-Exchange Fees When You Travel Abroad

Be selective about how you exchange dollars for foreign currencies.

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Traveling overseas when the dollar is still relatively strong is smart, but paying pesky foreign-exchange fees isn’t. Follow these rules to get the best bang for your buck on currency exchanges.

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Before you leave, make sure the credit card and ATM card you plan to use are free of foreign-transaction or conversion fees (typically up to $3 per ATM withdrawal and up to 3% on purchases). One account that charges neither is Capital One 360 (although the foreign ATM owner may levy a fee). For credit cards, check out the Barclaycard Arrival Plus.

Having foreign currency on hand before you depart isn’t a must. Your U.S. credit card will often work for cab or train fare from the airport. Avoid Travelex, a currency-exchange firm, and ATMs at airports — both tend to offer expensive exchange rates or charge fees. Wait until you can withdraw local cash at a major bank’s ATM at your destination. But if you do choose to buy euros, yen or any other currency before you leave the U.S., you’ll find that regional banks, such as Comerica and Northern Trust, and credit unions often beat the big national banks on exchange rates, says Jill Gonzalez, an analyst with WalletHub.com.

Use your credit card for most purchases. Some merchants may ask if you want to charge the amount in dollars rather than the local currency. Say no. Otherwise, you’ll give the merchant the opportunity to set an unfavorable exchange rate.