Changing money without losing on it

Look at the spread, not the rate

The rate in the news is the interbank rate; what individuals actually buy and sell at is worse. That gap is the spread, and it varies a lot by currency and by counter. It is why changing the same amount on the same day gives different results depending on where you go. Compare the final amount of foreign currency you receive, not the quoted rate. Even when the rates look similar, preferential discounts and separate fees can change how much you actually receive. The quickest comparison is to enter the same home-currency amount in each bank app's exchange screen and line up the foreign amounts you would get.

Where it is cheaper to change

Online exchange through your main bank usually offers the best rate, and airport counters the worst. Change only what you need for transport at the airport, and arrange the rest in advance or locally. Less widely traded currencies can be hard to get at home or carry wide spreads, so some travellers take a major currency such as US dollars and change it again locally. That means paying for two exchanges, so judge case by case.

• Order online in your bank's app, collect at a branch or the airport
• Check the preferential rate at your main bank
• Use airport counters for the bare minimum
• At private exchanges abroad, check how fees are disclosed first

Splitting cash and card

Changing everything to cash creates loss risk and the cost of converting leftovers back. In countries where cards are widely accepted, carry cash for small payments and use a card for the rest. Cards carry foreign transaction fees, so knowing which of yours charges least makes a real difference. Withdrawing local currency from an ATM abroad is another option, but your card issuer's foreign withdrawal fee and the machine operator's fee can both apply, so check the terms beforehand. Guidebooks and recent traveller reviews tell you in advance whether a country still runs largely on cash.

Decline when asked to pay in your own currency

Abroad, a terminal may ask whether you want to pay in your home currency. The rate is set by the merchant's side, usually to your disadvantage. Paying in the local currency is almost always better. If the terminal screen or receipt shows an amount in your home currency, you can ask for the payment to be redone in the local currency before you confirm it. This practice is known as dynamic currency conversion, and some card apps let you block it altogether.

What to do with leftover currency

Coins are generally not exchanged back, so spend them before leaving. Notes lose to the spread a second time when you sell them, so you pay twice. If another trip is likely, simply keeping them is reasonable; airport donation boxes are another option. If you keep leftover notes for a future trip, be aware that a currency can change its banknote designs and restrict the use of older notes.

Using a prepaid multi-currency card

Cards that you top up with foreign currency in advance and then use to pay or withdraw abroad have become common. They often reduce conversion and foreign transaction fees, but the conditions, limits and withdrawal fees differ between products and change often. Before signing up, check which currencies are supported, how top-ups work and what happens when you convert the remaining balance back. Do not rely on that one card alone; carry an ordinary credit card as a backup. If you lose a card abroad, freeze it in the app straight away and report it to the issuer.

Do not try to time the rate

Many people wait for the rate to improve before changing money, but nobody can reliably predict short-term currency moves. The point of changing travel money is not to profit but to get the cash you need at low cost. If doing it all at once feels uncomfortable, you can split it into a few exchanges over the weeks before departure. This is general information, not investment or currency-trading advice.

Checklist before you leave

Fee rates and preferential terms differ between banks and card issuers and change frequently, so check again just before departure. The items below apply whatever payment method you use.

• Enable overseas payments and transaction alerts in your card app
• Check foreign payment and withdrawal fees
• Save the number for reporting a lost card
• Carry two or more cards, stored in different places
• Have a little cash ready for the airport