Also, a lot of places around the world (where I go, especially street food type places) don't accept cards.
Taking local money out of bank machines is a huge rip off. Huge fees and bad exchange rates
Again, this is assuming that there isn't some sort of black market for exchange that's causing published rates to diverge from real rates, but that's only the case in relatively few countries.
Oh man this is hilarious. Places with zero commission end up charging the absolute worst exchange rates. You're better off paying a small commission/fee and getting a good exchange rate instead of those zero commission places that don't charge a fee and fleece you with a crappy exchange rate.
Maybe, USA banks are better, but not everybody live in USA and has USA credit card.
I don't understand the advice here either. It's not hard (at least as someone in the US) to find a card offering no foreign transaction fees, and I thought everyone agreed that the card network conversion rates are about the best you're going to find as traveller.
ATM fees can sometimes be unavoidable, but sometimes even finding a functional ATM was a blessing, so ...
If your credit card doesn't carry high fees for the service, the network currency conversion is the way to go.
Here is the key. My bank takes 2.5% commission on any transaction not-in-card-currency (in addition to about 0.75-1% commission of MasterCard/Visa system itself) and something like 0.5% for cash withdrawal in any ATM of any other bank, no matter in which country or currency.
And, oh, wait, if it is true credit card (non debit one) I don't have grace period for cash-like transactions and need to pay card interest from first day (for "buy" transactions I need to pay interest only if I don't resupply credit card after month end + 20 days).
And it is typical conditions in my country. Some banks has conditions slightly better, but they have other problems.
When typical spread for cash exchange in South-East Asia is about 3% (+1.5% / -1.5%) to FOREX, which is much better.
Typically: you could exchange $1 to 24000 VND now (oh my, I remember when it was 16000), but if I withdraw VND from my debit card (which is in USD, not my native currency) it will be something like 22000 VND per USD.
Other example: I'm in Armenia now, and I exchange USD to AMD on the street as 1:406 (406 DAM for 1 USD) without any commission (xe.com shows 1:401 right now). When I BUY something (not withdraw money!) with my USD card it is about 395-390 AMD per USD.
I have Visa card with Euro (I know, strange combination) issued by Serbian bank.
I'm in Armenia right now, and street rate for Euro is 390-394 DAM per Euro (no commission).
My last transaction with this card is 5300 AMD / (13.65 + 0.14) Euro = 386.86... (Don't ask why this bank shows one transaction as two, it is something like sum at block correction at charge?). I can not withdraw cash in ATM in Armenia from this card at all, transactions are simply cancelled, so I can not say, which rate it is for ATM. But in Serbia I've payed 0.5% for cash withdrawal.
i remember annoying my hosts once because i insisted on checking 3 or 4 places to compare rates and make sure i didn't get ripped off.
Yes, I'm not from USA, and we don't have any cards with real cash-back. Typically exchange rate for all banks in my country is like xe.com + 3-5%. It is terrible.
Only one time I seen really monstrous exchange rate for cash: in Istanbul airport. It was complete rip-off. Exchange booths in Istnabul itself were better than my bank exchange rate.
And typical spread in exchange booth in Myanmar is 0.1%. Yes, 0.1%. Like, 1000/1001 per dollar if you have $100 bills (worse for $50 and lower).
Ahh, now I understand where the disagreement is coming from. For US cards, it's not cash-back rewards which make them a good value for foreign exchange. It's that the networks (eg, VISA, or Mastercard) offer currency conversion rates which are much closer to par than local retail services. (or, your bank, apparently.)
This article has a few good example charts for the networks:
https://www.thinmargin.com/blogs/visa-vs-mastercard-who-give...
Typically there is a 1% fee for the service. However, many premium cards will waive this fee as a privilege. If you have access to a card like this, it's a no-brainer.
I don't know how is it work, but I see such transactions in bank's online service as "Transaction Amount: xxx.yy AMD, In account currency: zzz.qq USD" and when you divide one by the other you get something like 5-7% difference with FOREX exchange rate (of course, not to you side!).
If your card is in native currency, it is even worse, as there is double-conversion via system currency (USD in case of Visa, EUR in case of MC).
I don't know, why our banks have their own exchange rates and not Visa/MC rates and how Visa/MC allows this.
1) an account in the local currency with a debit card;
2) credit cards without foreign transaction fees and cash- back
3) ATM withdrawal with a no-fee debit card
Changing USD in cash to get local currency is almost always the worst option. They charge 5%-10% on the exchange rate plus whatever fees.
Can you? This doesn't seem to be the case except in countries where the real exchange rate has drifted from a government-imposed one. The spread on my credit card and ATM card are low enough (very negative, in fact, on the credit card when we consider cashback) where if this were the case I would be able to arbitrage against said jewelry stores.