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Cash vs card abroad: which costs less?

· FxRate Desk

Picture a traveller we’ll call Dana, a made-up person, stepping out of arrivals in Lisbon with a phone at 14 percent battery and a wallet full of pounds. There’s a taxi queue to her left and a bright yellow currency kiosk straight ahead, glowing like a vending machine for money. It says “no fees”. She’s tired, the queue is long, and the kiosk is right there.

Dana is about to run the oldest experiment in travel money: cash or card? The honest answer is that neither wins every time. But the gap between a smart choice and a lazy one can be a few pounds or a few dozen, and it’s worth knowing where the leaks are before you land.

What actually happens when you pay by card abroad

Say Dana’s taxi driver takes cards. She taps, and behind that tiny beep the payment gets converted from euros into her home currency. Two things decide the price of that conversion. The first is the exchange rate. The second is any fee her bank tacks on top.

The rate usually comes from the card network. Mastercard’s own converter page says its rates are specific to the date and time your bank authorises the transaction, and that your bank “may or may not” use them and may add fees of its own. One explainer on Visa’s rate makes a related point: the rate applies on the day Visa processes the payment, which can differ from the day you bought the thing. So the number on your statement can drift a little from the number you saw at the till.

Then comes the bank’s cut. NerdWallet describes foreign transaction fees as usually around 3 percent of the purchase, charged by the card issuer. Which describes a similar picture for UK credit cards, with a non-sterling transaction fee of up to 2.99 percent. Some cards charge nothing at all, and Visa’s own travel page notes that cards with no foreign transaction fees can offer rates often within 0.5 to 1 percent of wholesale market rates. These are all “as of November 2026” kinds of numbers. Fees change, and your card’s terms are the only ones that count.

The question the card reader asks

Now Dana is at a restaurant, full of grilled sardines and optimism. The waiter brings the card reader, and it asks: pay in euros, or pay in pounds?

Pounds feels friendlier. It’s her money, in her units, no maths. That friendliness is the trap. This is called dynamic currency conversion, or DCC: the shop or the machine, not your bank, does the conversion, using its own rate. Visa describes it as a merchant or ATM offering to convert the transaction into your home currency, with an exchange rate and additional fees included. Mastercard’s page adds that when a merchant or ATM operator does the converting, Mastercard’s rates don’t apply.

How much worse can it be? Visa’s travel page cites a 3 to 5 percent markup. Which reported that NatWest found a Spanish accommodation provider charging up to 13 percent more when customers paid in pounds rather than euros, which on a 500 EUR stay could mean more than 50 pounds extra. That’s a worst case, not a typical bill, but it shows how wide the range can get.

So the usual advice from consumer sites is the same everywhere: choose the local currency, so your own bank does the conversion. Visa itself says merchants and ATMs must let you choose, must show the amount in both currencies plus the rate and any fees, and must not choose for you. If the details are missing or someone pressures you, it recommends declining and reporting it to your card issuer. Declining won’t stop the payment going through.

Cash from a cash machine: two fees, not one

Next morning Dana wants cash for a market, because the stall has a hand-written sign saying “dinheiro” and nothing else. She finds an ATM.

Here, two different parties can charge her, and people mix them up all the time.

First, the operator’s fee. The company that owns the machine sets it, and NerdWallet notes it varies by country and operator. Second, your own bank’s fees. NerdWallet says the foreign transaction fee on a debit card is often between 1 and 3 percent, and some banks add a flat out-of-network fee, commonly $2 to $5 in the US examples it gives.

Credit cards can be pricier for cash. Which notes a cash fee of around 3 percent with a minimum, and interest that starts immediately rather than after a grace period. Using a credit card for cash is rarely the cheap route.

Flat fees punish small withdrawals. Take out 20 euros three times and you pay three flat fees. Take out 150 once and you pay one. The catch: carrying lots of cash has its own risks, so it’s a balance. Which also suggests using a machine attached to a high street bank, since stand-alone ones can charge extra premiums, and avoiding high-cost ATMs in places such as airports.

And yes, the ATM will ask the DCC question too. Same answer: local currency.

Why the airport kiosk is the priciest option

Back to that yellow kiosk. It makes its money from the rate, not from a visible fee. Bankrate says kiosks prominently advertise “no fees” but earn through markups, and that airport and tourist-area exchanges often mark up 8 to 10 percent or more. Its example: $1,000 buys about $920 of foreign currency at a bank but about $820 at an airport kiosk. NerdWallet reports airport exchanges charging around 14 percent more than the IMF exchange rate, with some premiums above 17 percent.

That’s the trick: a rate that looks fine at a glance and a sign that says no fees. NerdWallet calls airport exchange typically a terrible money move, and Which advises steering clear of high-cost ATMs in airports too. If you must have cash on landing, keep it to a small amount.

A worked example: 500 EUR of spending

Let’s put numbers on it. This is illustrative, not a quote from any provider. Assume a home currency of US dollars and a mid-market rate of 1 EUR = 1.10 USD (you can check where the real rate sits right now on our USD to EUR page). The same trip with pounds would use the GBP to EUR page. Baseline: 500 × 1.10 = 550.00 USD, which is what 500 EUR costs with no fees at all.

Card, 3 percent fee. 550.00 × 1.03 = 566.50 USD. Extra cost: 16.50.

Two ATM withdrawals of 250 EUR. Assume a 4 EUR operator fee each, a flat 3 USD home bank fee each, and no percentage fee. You are debited 254 EUR twice, which is 508 EUR. At 1.10 that’s 558.80 USD, plus 6.00 in bank fees, so 564.80 USD. Extra cost: 14.80.

Airport kiosk, rate 8 percent worse. The kiosk effectively charges 1.10 × 1.08 = 1.188 USD per euro, so 500 × 1.188 = 594.00 USD. Extra cost: 44.00.

Option (illustrative)Total in USDExtra vs 550.00Extra as %
Card, 3% fee566.5016.503.0%
ATM, 2 withdrawals, flat fees564.8014.802.7%
Airport kiosk, 8% worse rate594.0044.008.0%

Look at the first two rows. The card and the ATM landed within two dollars of each other. Change the assumptions and the order flips: a card with no foreign fee would cost just 550.00 and beat both, while a bank that charges 3 percent on ATM cash on top of the flat fees would push the ATM above the card. The kiosk, though, stays behind in almost every version. Stack DCC on any row and the total climbs further.

Where cash still earns its place

None of this means leaving cash at home. Think of a street-food stall in Bangkok, a tip jar, a small guesthouse that adds a surcharge for cards, or a rural bus. Acceptance varies by country, city and even street, so the safest approach is to read up on your destination before you fly rather than assume. If you’re heading to Thailand from the US, a glance at the USD to THB page gives you a feel for the rate, so a price on a menu makes sense at once.

Cash also has a quiet virtue. It stops the DCC question from ever being asked. And a small cash float means a dead card network or a lost phone is an annoyance, not an emergency. Just keep it small and keep it split between pockets.

A short pre-trip routine

  • Check your card’s foreign transaction fee and your bank’s ATM fees before you go. Terms change, so look this month, not last year.
  • Decide on a rough cash float, then take it from a bank-linked ATM in one or two withdrawals.
  • Always choose the local currency at the reader or the ATM.
  • Compare a few currencies side by side on our rates grid if you’re visiting more than one country.

Dana, by the way, skipped the kiosk. She joined the taxi queue, paid in euros when the driver’s reader asked, and took out one sensible withdrawal the next morning. The sardines were excellent. She says nothing about the fees, because there was nothing left to complain about.

This guide is general information, not financial advice. Fees, rates and rules differ by bank, card and country, so check your own terms.

Sources

Checked: November 2026