Money in Europe: How to Deal with Foreign Currency

by Suzanne Pidduck

When planning a trip to Europe for the first or second time, you may find yourself a little confused by the issue of money. You know, of course, that you will need it, and it goes without saying that you want to get the best exchange rate possible. But how, when, and where do you exchange dollars to Euros or pounds? Should you use cash, a debit card, a credit card, or traveler’s checks?

Fortunately, if you know the right questions to ask, a phone call or two with your bank should solve most of your travel money woes. Below you will find my handy little guide for using your money most effectively when traveling in Europe – and avoiding getting stuck without any!

Before Your Trip

The most important thing to do before you leave is to call your bank. Do this about two months before your trip in case you discover that you need to check around for different rates. Here is what you should discuss:

  • Just to make sure, confirm with your bank that your card is in fact useable in the countries where you’ll be traveling. With most large banks, this is not a problem, but if the answer is “no” or “maybe,” it’s time to shop around.
  • Tell your bank when and where you will be traveling. When your bank sees that your normally steady and reliable card has just been charged for three hundred dollars’ worth of Murano glass in Venice, you can’t blame them for assuming that some international thief has made off with your purse! Alerting them in advance will also guarantee that you don’t have any of those embarrassing “card declined” moments at the checkout stand!
  • Ask your bank if it has any partnerships with foreign banks. If they do, you may be able to use that foreign bank’s ATMs without a transaction charge. Find out the names of these banks and look for them whenever you pass an ATM. But whether or not you have to pay a fee, you will still get the best exchange rate by using your debit (not credit) card at local ATMs. Just be aware that most ATMs have a flat transaction fee and may also charge a percent of the amount withdrawn.
  • Order some cash in the local currency before you go. You can do this through your own bank, but you might want to call around to several banks to see where you can get the best rate (I recommend Bank of America). Be aware that it could take some time for the order to arrive. However, ordering cash in advance is especially important for anyone who is renting an apartment or a villa in Europe. Most European rentals require a security deposit to be paid on the spot, in cash, before you are admitted to the property. And although many travelers will insist that the easiest way to get foreign currency is by withdrawing money from the airport ATM upon arrival, renters should be warned against this. Remember that either your card or the ATM will probably have a daily withdrawal limit! Many’s the time a client has called us, panicking because they weren’t able to withdraw enough cash to pay their deposit. Of course, there are also other risks involved with depending on an airport ATM – after all, who knows when it might be closed for repairs? I recommend ordering enough cash for your security deposit, plus enough to survive for one day, should something unexpected happen. Think about how much you would spend for three meals, a cab, and a hotel room.

During Your Trip

All of this is in preparation for your trip. What should you do when you go?

  • Sometimes the amount of cash you will be carrying can be intimidating. It goes without saying that you should keep it in several places. If you are traveling in a group, split the cash between travelers so that no one person has an excessive amount. When traveling alone, I usually split my cash between my purse, a money belt, and my suitcase, with the majority of cash in my money belt. Remember also to split your debit and credit cards! Several years ago I was traveling with a friend when all of her cards were stolen. Luckily I had mine and we completed the trip using the money in my account.
  • When you are spending money on a daily basis, use cash as much as possible and a debit card if necessary. Take a credit card (it is a good backup in an emergency), but don’t use it unless you have to! I used to recommend using credit cards, but recent changes mean that a charge on a credit card is now considered a cash advance. Because it is not a purchase or withdrawal, it will be subject to a much higher exchange rate.
  • Always keep some currency from the place you are coming from and the place you are going to. This includes the United States. A few months ago, my son traveled to France and then Turkey. At the end of his time in France, he did what most travelers would do: he tried to use up his Euros before arriving in Turkey. However, in Turkey he discovered that he could only pay for his visa in Euros or US dollars – neither of which he had! Fortunately the problem was solved, but not without a lot of stress. Of course, this means that when you get back home, you may be left with some extra Euros or pounds. My recommendation? Just save them – you can use them on your next trip!

Hopefully this has cleared up most of your questions about dealing with money on your trip to Europe. You may have noticed, however, that I haven’t talked about traveler’s checks at all! If you can use traveler’s checks to pay the security deposit for your villa or apartment rental, and it makes you feel more secure to carry the money in this form, order some. However, for general use, I recommend ignoring them completely. The exchange rate is never great, and the inconvenience of finding somewhere to cash them is far outweighed by the cost-effectiveness and convenience of using an ATM debit card.


Suzanne Pidduck is a veteran traveler and the founder of an online company with more than twenty years’ experience in European villa rentals. Visit her travel tips blog for more articles!