1. The exchange rate margin
The biggest cost is usually invisible: a spread built into the rate. Measure it against the mid-market rate before you accept a quote, and treat "commission free" as a claim to verify rather than a saving.
2. Foreign transaction fees
Many cards add a percentage on every purchase made in another currency. Check your card's terms before travelling; the difference between a 0% and a 3% card over a two-week trip is real money. Model it with the fee calculator.
3. ATM charges
- Your bank may charge a flat fee, a percentage, or both.
- The ATM operator may charge its own separate fee.
- Flat fees hit small withdrawals hardest — a 5 fee on 40 is 12.5%.
4. Dynamic currency conversion
When a terminal offers to charge you in your home currency, it is offering to convert at its own rate. This is nearly always worse. Always choose the local currency.
Practical habits that work
- Convert on weekdays during market hours when spreads are tightest.
- Avoid airport and hotel exchange desks for anything but emergency cash.
- Decide the amount before you travel and plan it in the travel money planner.
- Check the arriving amount, not the advertised rate.
Set your own benchmark
Before any conversion, look up the current mid-market figure on the rates page or run the amount through the converter. Knowing the fair number is what makes an unfair offer obvious.
Common questions
Is it cheaper to pay by card or cash abroad?
It depends on your card. A card with no foreign transaction fee that converts at or near the mid-market rate usually beats airport cash exchange, which often carries the widest spreads.
Should I withdraw a large amount at once?
When your bank charges a flat ATM fee, fewer larger withdrawals reduce the percentage cost. Balance that against the risk of carrying cash.
Do weekend conversions cost more?
Often, yes. Markets are closed, so providers widen the spread to cover the risk of the rate moving before they can settle.