0A1E55DD-8B6E-4DF1-894A-D2958311BC66Step outside your home country, and you’ll quickly learned that banks, credit cards, ATMs, and currency exchanges are not all created equal. Expats and those who travel abroad frequently would do well to have a basic knowledge of how to save money when converting dollars into other international currencies.  Let this blog be your primer to “international money”. Whether you’re going on vacation, living abroad, or buying a second home- let these lessons guide you in stretching your dollar.


The first and most crucial step is knowing exactly what your dollar will/should buy in the foreign currency you want at the time you want to exchange it.   Be aware that not only do currency exchange rates fluctuate, they fluctuate throughout a given day.

2688CAD0-689F-42FC-BE44-DC837F5CC4A2I recommend adding a currency converter app to your smart phone. There are several to choose from, and will provide the mid-range rate for the currency/currencies you want.  I like one called, Currency, just go to your App Store and find the logo on the left- it’s free.  Again, the rates change constantly, so a rate you may see today, may be much different later in the day, next week, or next month. But by having an app on your phone, you’ll have the latest real-time rate.   This current rate is the rate you want to aim to achieve in your exchange.

F40AD439-A2EC-4CBC-8842-6C8EA3EA8D00Having that app on your smart phone allows you to see the current rate while you’re standing at that ATM, currency exchange office, or bank.   The app allows you to add multiple currencies on one screen. Simply type in the value of your dollars, or foreign currency to see current rates.  Simple, quick and easy.

[In many ways, exchanging dollars into another currency is very much like gambling. The dollar’s value may go up or down depending on many factors that you’re unable to control.  In addition to the regular fluctuations of currency based on financial trends, there are other factors to consider.  Elections, natural disasters, political unrest, etc., can all impact a currency’s value.  If you’re traveling on vacation, living abroad, or making a major purchase, timing can be everything – but unless you have a crystal ball, you’ll need to make your best guess in timing your exchange, and then go for it.]


Once you know the conversion rate you should be receiving, the challenge begins in finding the best process to make that happen. Banks, credit cards, ATMs, and currency exchange agencies are all built to charge you fees, commissions; and NOT give you the daily exchange rate you see on your app.  That’s how they make their money, by taking a part of yours.  Your challenge is to convert dollars into the foreign currency, and be as close to the conversion rate provided by your app as possible.   That’s more difficult than it sounds, but with preplanning, it can happen.


Not all ATM cards are created equal in the world of currency exchange. As a matter of fact, most American bank ATM cards charge fees for using ATM machines outside their network, charge a currency conversion fee, and may also give you a conversion rate significantly less then you’ll find on your app.  In addition, the foreign ATM machine will also charge their own fees, which will come out of your bank account.  And you may not even know the conversion rate you’re receiving, as foreign ATM machines will simply give you the cash requested, not itemize what was charged.  You’ll need to log into your bank account to see what you were charged in dollars for that foreign cash you received.

2713EAC4-7CF4-4E64-B504-6706D340DD43But a phone call to your bank before you leave the US is an important step -and ask them what’s the fee for using an ATM machine outside their network, and what do they charge for a currency conversion fee.  Again you’re looking for an ATM card that will give you exactly what the currency conversion app is showing you. There are three banks that I recommend for ATM cards with a good reputation in this area. They are Charles Schwab bank, USAA bank, and Capital One 360.   Each advertises that they not only waive their own non-network ATM fees and the currency conversion fee, but each also waives the ATM fees charged by the foreign ATM machine you are using.

Your goal is to get a conversion rate as close to that indicated on the Currency app.  Also be aware that different foreign ATM machines will give different foreign conversion rates-  so it pays to switch around and compare.   And avoid foreign ATM machines that do not appear to be associated with a particular bank, those are independent for-profit machines that will give you a lousy exchange rate.  I live part time in a very small town in Italy.  When using my Charles Schwab ATM card, I receive a better conversion rate from Deutsche bank & BPERS bank than I do from Bank of Napoli, for example.   And I never use ATM machines that are located near tourist offices, bars or restaurants that appear unrelated to any national bank in the country I’m visiting.  So you want to be sure the ATM card you are using charges NO fees, and then select a foreign ATM machine that will give you the best rates.  One other note, sometimes the foreign ATM machine will ask if you want the withdrawl converted to your home currency – don’t do it.  It’s more expensive.  Let your own bank make the conversion from the foreign currency to dollars from your account.

Up your limit.   Most ATM cards will allow you to withdraw the equivalent of US$300-500 in foreign currency per day.   However, sometimes I just need more cash than that. A simple phone call to my bank requesting to ‘up my limit’ to $1000US in foreign currency can be done. You’ll have to answer special security questions so the bank can be sure it’s you.  And the increased withdrawl is only good for the next six hours. But it’s a good option to have if you need to make larger withdrawls than normal.

For security-  When you take an ATM withdrawal abroad, be sure to log into your bank account and see what you were charged overall.  This should also be a regular practice to protect your ATM card, as well. All over the world, there are ATM machines with skimmers, illegal devices used to copy and then clone your card, and deplete your bank account.  So regularly monitor your bank withdrawls when traveling or living overseas.   And contact your bank immediately if you discover any irregularities.


There’s also a strategy to using credit cards abroad.   Just as you are careful to avoid extra fees on your ATM cards, the same is true for your credit cards. Credit card companies are notorious for charging currency conversion fees, and other hidden fees, when using your credit card out of the country.

4BEB6995-260A-4754-B468-9DCD3469F177When using a credit card, the goal is always to be charged in dollars what the Currency app indicates at the time of the purchase.   Again, as you did with your ATM cards, call your credit card company and ask what fees they charge to use your credit card outside the United States. Ask if there is a currency conversion fee, and other charges. In addition, when using your credit card at a foreign merchant, if asked if you want the charge made in your home currency, say no. It’ll cost you more if you do it. You want the merchant to charge in the foreign currency, and let your credit card company do the conversion themselves.

I love and highly recommend my Capital One credit card for use overseas. No fees, and excellent currency conversion rate.  As a matter of fact, I always use my Currency app to see what rate I should be getting for my credit card purchase.  Then with Capital One, I’ve signed up to get an immediate text messages for any credit card charge over $1 dollar.  I always receive Capital One’s text message notifying me of the charge in DOLLARS, within a minute of signing the merchant’s receipt.   It’s an excellent way to monitor all credit card charges, and be immediately alerted to any unauthorized purchases.


I do not use and do not recommend using the following.  However, in an emergency situation, you may have no choice.

  • Bringing dollars (In most countries, changing dollars into local currency costs more, much more than simply withdrawing money from an ATM machine).
  • A debit card (too risky),
  • A cash advance on a credit card or ATM card (too expensive),
  • Personal checks (difficult and expensive to cash), or
  • Travelers checks (difficult to use & poor exchange rate).


25B31033-BF9A-45BC-B9F7-1BA6CF6C6F88Many travelers will ask what’s the best way to get foreign currency before I leave the US?  The easy answer is don’t. You will always get a better exchange rate on the ground from an ATM machine in your destination, including the arrival airport. However, sometimes those airport ATM machines upon arrival are crowded with a line.   If you can arrange transportation to your hotel using a credit card, do it.   Then exchange money at a bank ATM near where you were staying. But if you simply feel better carrying some foreign currency from the US, then you can use Currency Exchange booths inside the departing airport, if available—-  or currency exchange services in the US like Thomas Cook or your own local bank.   But be aware their exchange rates are usually terrible, and they charge commission.  Use your Currency app to see just how much money you’re going to lose with this option, and exchange only enough dollars to cover you until you can get to a foreign ATM machine.


For those individuals living and/or working overseas, or owning property overseas- serious consideration should be made regarding opening a foreign bank account.   Generally speaking, opening a foreign bank account is tedious work,  involves paperwork and visa/residential requirements, and most likely will involve substantial monthly fees.

E41EB7AE-2DAB-4955-8495-4EB279ECD736In addition, Americans will find they’re not welcome to open a foreign account at some banks because of FATCA,   The Foreign Account Tax Compliance Act (FATCA) is a 2010 US federal law that requires foreign banks to report to the US any American holding an account at their bank.  It’s a reporting nightmare.  And many foreign banks are simply turning down Americans that apply for a bank account.   And I also know Americans that have had their established foreign bank accounts closed because banks simply don’t want the FATCA hassle.   Also because of FATCA,  it’s important to be aware that Americans holding a foreign bank account with $10,000 or more must report those accounts and their assets each year to the US or face stiff financial penalties.

Most individuals choose to open a bank account to set up automatic bill pay, particularly if they own or rent an apartment abroad.   This is a significant convenience, however I am repeatedly aware of individuals that have tried to stop auto pay and found it extremely difficult, and costly.  Giving the gas or electric company, cable or Wi-Fi company, or others access to your bank account via autopay is risky business overseas.  I have repeatedly heard of expats that have been transferred to another country, but found it nearly impossible to close the bank account while an auto pay vendor refuses to stop making deductions.  If you’re interested in opening a bank account for this purpose, you’ll do well to talk with others in your town/country and get firsthand recommendations regarding their experiences.

I’m an expat to both Italy and Brazil, and own property in each country.  So I have monthly bills to maintain those properties.  I’ve chosen NOT to open a bank account in either country.   And I haven’t regretted that decision. Instead, I rely on friends or neighbors to assist me in paying my bills when I’m out of the country.

An emerging trend is online or virtual banks.  Not online banking, which most brick & mortar banks provide- but actually banks that are completely online, no bank branches or buildings.   These are aggressively recruiting customers by eliminating monthly fees, providing competitive services, and customer service.   Again chat with neighbors and others in your town/country regarding this option.

0C92AFB2-B254-464D-AC62-B60D1CB53627I recently opened one of these virtual accounts with Transferwise. Transferwise is a company that established itself several years ago with low cost wire transfers from one country to another.   Transferwise recently began an online banking service called “Borderless Account”.   With my Borderless account, I can hold money in various foreign currencies from over 40 countries.   With this type of account, others can pay me IN the foreign currency directly to my Borderless account, or I can pay out to others using the foreign currency directly.  In my case, I have simply chosen to hold euros in my Borderless account.   So others can pay me in euros and deposit directly into my Borderless account, or I can pay others in euros directly from this account.   One advantage of holding foreign currency in my account is the ability to move dollars into euros when the exchange rate is the most positive for me. I don’t have to wait to pay a bill or make a purchase before I convert dollars to euros. I simply move dollars into euros when the exchange rate is favorable via my Borderless account. And then I have banked euros to use when I need them.    Transferwise even allows you to set up a notification service, so I get emails when the dollar to euro exchange rate significantly changes in my favor. And you can now set up autopay for bills too. There are limitations to this kind of account, for example there is a cap in how much you can withdraw using the ATM card associated with your account.


B8DE96DA-F028-42BC-8A3E-FC4DDCD209E0Finally, sometimes you just need to move larger amounts of money from one location to another- and ATM cards, credit cards, etc. won’t do the job.   Or you have a foreign bank account or virtual/online bank account and need to move money into that account.   Then transferring or wiring money is the next option.  We’ve come along way since the days of wiring money from your bank in the United States to a foreign bank.  While people still use this option, it tends to be the most costly, and time consuming.   16 years ago I bought my property in Brazil, and transferring the money from my US bank to the Brazilian bank took more than two weeks!  And my US bank was unable to specify in detail exactly how much foreign currency would arrive at the other end!  Today, that kind of transfer can happen in just a few days with the exact arrival amount confirmed upfront, thanks to new competitive agencies, vying for your business.

Remember the Currency app I encouraged you to place on your smart phone? Throughout this blog it’s been an important resource for knowing the current exchange rate.   That app should be your guide in selecting a bank/service to wire your money, as well.  Over the years, I have wired from my banks- CitiBank and Bank Of America. When I reflect back on the terrible exchange rates and high fees I received, I’m thankful for the new services available.  Here’s two services to consider when wiring money:

Transferwise-  I swear by Transferwise. They provide the latest currency rate, and detailed their fees upfront. In addition, you can send money based on the dollar amount, or the international currency amount.  Everything is upfront. And most wires take just a day or two! They have a convenient app for your smart phone, and I can send money in less than a minute.  They also have live people who answer the phone when you call. All around it’s a solid, well respected, and convenient service.

OFX  is a similar service to Transferwise. Competitive rates, and quick service.

I’ve had many people speak about wiring money using their local US banks, or Charles Schwab.   I have compared the rates, and they’re not even close.   I have bought five different international properties, and have had to wire large sums of money.   Even a tiny fluctuation in the currency conversion rate can mean thousands of dollars.   So it pays to do your homework. Compare banks and transfer services like Transferwise and OFX and others.   Use your Currency app to know exactly what rate is the target.


Keeping more money in your pocket is the goal. They say, “A fool and his money are soon parted”.   I hope you’ll use the tips I’ve provided here to keep as much money in your pocket as possible.  Be savvy in the ways of international money exchange and transfer.   And bon voyage.

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