Be A Smart Money Changer

Whenever we go abroad to anywhere in the world we always revisit the question of what makes the most money-sense when it comes to changing our currency. Like many of our readers, we work hard and strive to avoid having to pay any unnecessary or excessive fees. Below is a brief list of the different options travelers have when it comes to exchanging their currency and the pros and cons of each option.

Cash Withdrawal From ATMs
Over the past 10 years we have found that the easiest and most cost-effective way to exchange currencies is through a foreign ATM. ATMs are widely used throughout Europe and Italy is no exception. Simply bring your debit card with you to make a withdrawal at any ATM that bears the same logo as seen on your card (e.g. Nice, Cirrus, etc.). The ATMs will dispense cash. Preferably, use ATM's that belong to or are affiliated with the bank that issued your ATM debit card at home as this will save you some money on bank fees.Typically, you will receive a service charge from the bank you are withdrawing money from, your bank at home and a charge for the currency conversion itself. Some banks have foreign relationships with each other and this often reduces certain fees that are charged.

Bancomat ATM

There are several real concerns one should consider before using a debit card at a foreign ATM. First, a debit card is directly linked to your bank account. If you are worried about unauthorized use of your debit card make sure to check your bank statements regularly while you are abroad. Setting up online access to your bank account is a great way to monitor your account activity.

Another concern with using a debit card at an ATM is that some banks will put a freeze on your checking account if they see any unusual activity, especially if the activity is coming from abroad. Once a bank puts a freeze on your account you will be unable to withdraw money from your checking account until you speak to a bank representative. Save yourself the agita and time and let your bank know before you leave on your trip that you will be traveling and to authorize any transactions you might make while abroad.

Keep in mind that if you use your anything other then a debit card at an ATM that you will be charged additional fees by your bank and the dispensing bank as this is technically considered a "cash advance".

Also important to note is that many ATM machines have daily withdrawal limitations and often put a cap on the total amount of money one can withdraw during each transaction. We always try to take out the largest amount possible to avoid incurring multiple service charges.

Travelex and other non-bank ATMs charge high service fees

Most ATMs will dispense bills in large denominations which are often difficult to cash in more rural areas. We always withdraw odd amounts (as opposed to even) such as 480 euros instead of 500 Euros to ensure that we have smaller bills on hand. It is also a great idea to bring two debit cards in the case that one gets destroyed, fails to work or  you want to get double the amount of cash out each day. Lastly, make sure you use a bank ATM. ATMs that have no bank affiliation (e.g. Travelex) charge outrageous fees.

Credit Cards
In the absence of cash, a credit card is often the only form of payment that is accepted in restaurants, hotels and tourist attractions. The most widely accepted credit cards in Italy are Visa and Mastercard. American Express is accepted by many business establishments but is often the least preferred because of the higher service fees American Express charges.

Typically, you will incur a 1-3% service charge every time you use your card abroad. Using your card repeatedly will cause your fee-related costs to increase considerably. 

Bringing at least one credit card is important though we use our credit cards only for our big expenses such as car rental, hotel and restaurants.  As with our advice for debit card use, we strongly encourage you to call your bank to notify them of your travel plans and to authorize spending on your account during the time that you will be away.

Some banks offer pre-paid visa or mastercard that can be replenished through a checking account online. Ask your bank if you qualify for this option and learn about what fees, if any, are associated with the use of this type of pre-paid card abroad.

American Express Traveler's checks
We still have about $80 worth of American Travelers Checks sitting in a backpack that has been stuck in the back of our closet for the past 10 years. With the broader acceptance of credit cards and the increasing number of ATMs throughout Italy we believe that you have better options then purchasing Travelers Checks for your trip.

There are better options then using Traveler's Checks

It is possible to exchange your currency at every international airport. Non-bank related companies such as Travelex offer convenient currency exchange but at a premium cost to you. If you need some immediate cash (for taxis, quick bite to eat, etc.) then it's fine to exchange some cash at the airport. Better yet, use one of the many ATMs in the airport if you want to save some money. Change larger amounts of currency at your hotel or simply use another ATM anywhere outside of the airport.

Changing Currency at Your Local Bank
Another option for travelers is to purchase foreign currency at their home bank. Some banks like Bank of America offer favorable rates as they have business affiliations with some of the major banks in Europe. Check with your bank to see if this option is right for you.


Use this free currency exchange rate converter: Yahoo Currency Converter


We hope this helps you make a better informed decision when it comes to changing your currency. If you have any tips or suggestions on how our readers can save money please share them below in the comments section.
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