From Exchange Rates to ATM Fees: A Guide to Handling Foreign Cash While Traveling

There’s nothing like the thrill of traveling abroad and enjoying different cultures, delicious foods, and unforgettable sights. As you plan your itinerary, be sure to consider how you’ll pay for everything. While U.S. dollars and credit cards are generally accepted worldwide, having foreign cash on hand can be more convenient and, in some cases, the only way to pay.

When it comes to foreign currency, a little preparation can help you avoid potential markups, or worse, not being able to get the cash you need. Whether you’re planning a trip months in advance, or just about to zip up your suitcase, be sure to add cash to your travel packing list.

Foreign cash equals travel convenience

In the age of credit cards and mobile payments, carrying cash might feel outdated but in some destinations around the world, cash remains a common form of payment.

While tourist hotspots likely accept credit cards, many places might not. Think about a late-night taxi from the airport, a street market snack, or a small boutique off the beaten path. In those moments, having cash on hand can make all the difference for your trip.

At the same time, while international vendors may be willing to accept U.S. dollars, they typically charge a much higher price compared to the cost in the local currency. For these reasons, seasoned travelers use a combination of credit cards and foreign cash while traveling abroad.

TD Bank surveyed American travelers who took international vacations in the past year, and 94% of Gen Z and Millennial travelers reported exchanging cash before a foreign trip, with just under 30% stating that the local currency was their preferred payment method. Baby Boomer travelers were less likely to report foreign currency as their preferred payment method, but 75% still converted some cash ahead of time.

Across generations, one thing is clear: When you’re traveling abroad, cash is still king. However, how much your cash is worth depends on the foreign exchange rate.

Understanding exchange rates

An exchange rate is the price of one currency in terms of another. For example, if the dollar-to-euro exchange rate is 0.85, you would get €0.85 for every U.S. dollar you convert. Alternatively, one euro is worth about $1.18 at this rate.

If you are flexible with your travel plans, considering foreign exchange rates can help you decide where to go by identifying countries that offer better value for your dollars. In fact, TD Bank’s survey found that exchange rates were a major factor influencing international travel decisions for 75% of respondents, including 86% of Gen Z respondents.

Exchange rates fluctuate daily in response to global demand, economic trends, and market conditions. Tools like TD Bank's Currency Converter can be helpful when doing your research to determine where you can make the most of your dollar.

Turning dollars into foreign cash, without the extra fees

There are several options available when buying foreign cash, including at the airport, with your local bank, or at your travel destination. Your best bet is to plan ahead, to avoid potential costly markups.

If you need to exchange money in person during your trip, shop around for the best rates and be sure to compare rates, commissions, and fees. A few extra minutes could lead to considerable savings.

Another option is to withdraw local currency from an ATM using your debit card. Banks typically offer more competitive exchange rates on withdrawals than you’d find with cash exchange services, however you may still need to pay international ATM fees.

Check with your bank to understand the fees you might face at your destination. When you make a withdrawal, aim to take out as much as you think you’ll need to prevent unnecessary ATM fees for additional transactions.

Save by converting before your flight

According to TD Bank’s survey, 60% of travelers wait until after leaving the U.S. to exchange their money. However, your best bet is to plan ahead, or to "buy before you fly", to ensure a smooth travel experience.

TD Bank offers convenient foreign currency exchange options. You can purchase over 50 foreign currencies at TD Bank either online, by phone, and even in-person at your preferred local TD store.

Some TD Bank locations have major international currencies on hand, including Canadian dollars, European euros, Great British pounds, Mexican pesos, and Japanese yen. If available, you can visit a branch and exchange for these currencies on the same day.

If you return from your trip with unspent foreign cash, you can use the same TD Bank services to convert your leftover foreign cash back into U.S. Dollars.

More money for the trip of a lifetime

People work hard to plan and budget for their international trips—TD Bank’s survey found that 60% of respondents saved for six months to prepare. Don’t let that effort go to waste on unnecessary fees or unfavourable exchange rates.

By researching ahead of time and choosing cost-effective ways to get the foreign cash you need, you can put more of your travel budget towards making memories. For more information, contact your local TD Bank branch and ask about foreign currency exchange options for your next international adventure.

^{This article is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.}