Travel

For the biggest bang for your buck, use a credit card or withdraw cash at an ATM

By Melinda Page

updated 2/21/2011 1:31:33 PM ET 2011-02-21T18:31:33

When it comes to navigating exchange rates, it pays to know all your options. From buying money online to grabbing it on the go at the airport, we've assembled a handy guide to the seven most common methods for foreign exchange. Each has its pros and cons (some of which can feel like legal swindling), so we've evaluated the options for you with the euro as our base tender, using an Exchange Rate Rip-off Meter from 1 to 5. After all, we can think of far more fun ways for you to spend your money.

Swipe a Credit Card

Exchange Rate Rip-off Meter 1

How it works: You can use your credit card just as you would at home; card issuers typically tack on currency-conversion fees of 2 to 3 percent for international transactions, you'll get the best exchange rate and fees that are lower than those associated with exchanging cash. If you want to get the best rate, sign up for a Capital One card, which levies no fees for international transactions. *$100 buys €74.24.

Best for: The majority of your big purchases, hotel bills, and restaurant tabs. Basically, it's convenient enough to use instead of cash wherever possible.

Exception! Don't use it to take money out of an ATM — ever. You'll be hit with hefty fees (up to $20 in transaction fees or 4 percent of the amount of the advance, along with any local ATM fees), plus you'll be charged interest starting on the day you withdraw the money.

Withdraw Cash With an ATM Card

Exchange Rate Rip-off Meter 1