Posted by: Alina Comoreanu

Converting U.S. dollars into a foreign currency is necessary for most trips abroad. And we generally have two options for doing so: 1) automatically with a credit card and 2) by converting hard currency at a bank or airport kiosk. But which is the better deal?

You may not think this is worth worrying about, but there are actually hundreds of dollars at stake for most international travelers. So a strategic approach to currency exchange could be the difference between flying first class or coach, for example.

To help international travelers save as much as possible, WalletHub priced out the most popular currency exchange services. We collected the exchange rates and fees charged by the largest banks, credit unions and card networks as well as Travelex, which is commonly found in airports. And we determined how many Euros a traveler would get from each service in return for $300, as of May 12, 2017. We chose the Euro because it is the most popular currency among Americans traveling abroad.

You can find the results below, followed by a breakdown of the best international credit cards and bank accounts.

1. Main Findings
2. Best Credit Cards & Checking Accounts For International Spending
3. 5 Money-Saving Tips For International Travelers
4. Detailed Findings

Main Findings

Cheapest Option: A no-foreign-transaction-fee credit card saves travelers 9.72% relative to Travelex and 7.26% compared to the average bank/credit union.

 

*Numbers are averages and use of a no-foreign-fee card is assumed.

Lack of Consumer Awareness: Banks and credit unions don’t appear interested in reducing their markups, which are still below Travelex’s costs.

 

*Note: 2014 was the first year that Credit Union data was collected.

Bank vs. Credit Union: You won’t save money converting currency at a credit union rather than a bank.

 

Best Banks/Credit Unions: Even the cheapest banks and credit unions (State Employees CU, Comerica and Northern Trust) are more expensive than credit and debit cards.

Top 3	Bank/Credit Union	% Higher Than Credit Card / Debit Card		Bottom 3	Bank/Credit Union	% Higher Than Credit Card / Debit Card
1	State Employees Credit Union	2.94%		33	ESL Federal Credit Union	9.96%
2	Comerica	3.55%		34	First Tech Federal Credit Union	10.29%
3	Northern Trust	3.85%		35	RBS Citizens	11.55%

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Best International Credit Cards & Checking Accounts

WalletHub’s editors selected the following accounts because they lack foreign transaction fees and excel in at least one other major category, such as rewards, fees or 0% intro APRs.

2017’s Best International Credit Cards

Best for..	Card Name
Rewards	Barclaycard Arrival Plus
No Annual Fee	Capital One Quicksilver Cash Rewards
0% Purchases	HSBC Platinum Credit Card
Students	BankAmericard Travel Rewards for Students Credit Card
Business	Capital One Spark Cash

2017’s Best International Checking Accounts

Best for..	Account Name
Low Cost	Charles Schwab High Yield Investor Checking
High Rate	Capital One 360 Checking Account

For more options, check out WalletHub’s complete selection of no-foreign-fee credit cards and no-foreign-fee debit cards.

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5 Money-Saving Tips for International Travelers

 

1. Use a credit card with no foreign transaction fee

Why waste the time exchanging physical currency, not to mention risk carrying it around, when a credit card will handle everything automatically and give you the best exchange rates? Plus, plastic provides a $0 liability guarantee for unauthorized transactions should your card be lost or stolen.

You’ll save money no matter what card you use, but a credit card with no foreign fees will reduce your costs even more. Just remember to get such a card before booking anything through a foreign-based company. If the transaction is processed outside of the U.S., it will trigger a foreign fee.

2. Bring a debit card with low international ATM withdrawal fees as well

You’re going to need cash at some point, whether it’s for a cab, tipping a bellboy or something else entirely. Bringing a low-cost Visa or Mastercard debit card will enable you to get cash as needed and enjoy plastic’s favorable exchange rate. Unlike cash, a card is also replaceable if you get pickpocketed.

3. Notify your bank of your travel plans

Most credit and debit card companies will freeze your account if international purchases begin appearing without warning. That can be a clear sign of fraud, after all. In fact, American Express and Capital One are the only major credit card issuers that automatically detect when you’re traveling, according to WalletHub’s latest International Credit Card Report.

So make sure to tell your card issuers when you’re leaving, where you’re going and when you’ll be back.

4. Get the phone number to call your bank collect

If your card gets lost or stolen, being able to contact your bank will be helpful for two reasons. First, you’ll be able to nip any potential fraud in the bud. Second, you may be able to convince your bank to send you a replacement card.

Only three major credit card issuers will do so for free, according to WalletHub’s research, but a handful of others offer the service for a small fee. In any case, remember to be persistent. Even if international replacement cards aren’t standard, they’re usually available to customers in need who push the issue.

5. Steer clear of dynamic currency conversion

If a merchant offers to convert your purchase total from the local currency to U.S. dollars, don’t accept. They might be trying to help you, sure. Or they could be looking for an excuse to apply a high exchange rate and squeeze a bit more money out of you.

It’s best not to find out, especially when you can use your phone or a small pocket calculator to make quick conversions and see how much things cost.

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Detailed Findings

	2017 Exchange Rate	2017 Fee	% Higher Than Best Option
Debit Card	1.0895	1.92%	N/A
Credit Card	1.0895	1.97%	0.05%
Bank Avg.	1.1511	$4.52	4.95%
Credit Union Avg.	1.1579	$3.70	5.25%
Travelex	1.1955	$0.00	7.08%

Note: The Visa exchange rate is 1.0900 and the Mastercard exchange rate is 1.0891 . The average card exchange rate is therefore 1.0895. The credit card and debit card exchange rates reflect this average, as Visa and Mastercard are the most widely accepted card networks internationally. * Location New York City’s John F. Kennedy Airport

 

Bank	2017 Exchange Rate	2017 Fee**	% Higher Than Credit Card / Debit Card*
Comerica	$1.1296	$0.0	3.55%
Northern Trust	$1.1332	$0.0	3.85%
First Republic Bank	$1.1363	$0.0	4.12%
HSBC	$1.1363	$0.0	4.12%
BMO Harris Bank	$1.1368	$0.0	4.16%
Wells Fargo	$1.1451	$0.0	4.85%
BBVA Compass	$1.1079	$10.0	4.94%
Bank of America	$1.1482	$0.0	5.11%
PNC	$1.1640	$0.0	6.40%
Union Bank	$1.2080	$0.0	5.43%
PNC	$1.2126	$0.0	6.40%
Capital One	$1.1642	$0.0	6.41%
U.S. Bank	$1.1669	$0.0	6.63%
Chase	$1.1670	$0.0	6.64%
Bank of the West	$1.1483	$5.0	6.70%
BB&T	$1.1341	$10.0	7.13%
TD Bank	$1.1343	$10.0	7.15%
Fifth Third Bank	$1.1750	$0.0	7.27%
Santander Bank	$1.1634	$3.0	7.29%
Regions	$1.1616	$5.0	7.77%
Huntington	$1.1563	$8.0	8.29%
Suntrust	$1.1530	$10.0	8.65%
Key Bank	$1.1533	$10.0	8.68%
M&T	$1.1664	$7.0	8.77%
Union Bank	$1.1408	$15.0	9.27%
Citi	$1.1856	$5.0	9.63%
RBS Citizens	$1.1702	$15.0	11.55%
State Employees Credit Union	$1.1226	$0.0	2.94%
Redstone Federal Credit Union	$1.1309	$2.0	4.30%
Bank Fund Staff Federal Credit Union	$1.1400	$0.0	4.43%
United Nations Federal Credit Union	$1.1558	$0.0	5.73%
Onpoint Community Credit Union***	$1.1634	$0.0	6.35%
Eastman CU	$1.1652	$0.0	6.49%
Visions Federal Credit Union	$1.1815	$0.0	7.78%
Citizens Equity First Credit Union	$1.1562	$10.0	8.91%
ESL Federal Credit Union	$1.2101	$0.0	9.96%
First Tech Federal Credit Union	$1.1538	$15.0	10.29%

*Assumes no foreign transaction fee for credit card / debit card. ** Fee collected for in-person exchange. ***$10 is waived when $300 or more is exchanged.

We contacted 45 of the 50 largest credit unions, and only 10 offer currency exchange services.

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