When traveling abroad, knowing how to spot a good exchange rate can make a big difference in your budget. Even a small variation in rates can save you money… or cause you to spend more than expected. Whether you’re visiting a popular destination like Spain or exploring a lesser-known country, understanding how exchange rates work and how to identify a fair offer is essential.
In this guide, we explain everything in a simple way so you can make smart decisions with your money while exploring the world.
Exchange rates determine how much local currency you’ll receive for your currency. When the rate is high (in your favor), you get more foreign currency for each euro, dollar, or pound. When the rate is low, you receive less.
Let’s say you’re exchanging 100 euros. If one place gives you 110 USD and another gives you 100 USD, that’s a 10% difference, just due to the exchange rate. So it’s not a minor detail: it directly affects how much your money goes during your trip. That’s why it’s important to learn to evaluate the exchange rate before making the transaction.
The mid-market rate (also called the interbank rate) is the official exchange rate between two currencies. It’s what you’ll see on Google, XE.com, or financial media. However, this isn’t the rate you’ll typically receive as a traveler, as most providers apply a small markup.
Before exchanging money, check the average rate online. Then compare it to the one offered by the exchange office. If the difference is only 1–3%, that’s fine. If you’re offered a rate 5–10% lower than the average rate, you’re overpaying.
Tip: Check this rate before going to a currency exchange office or using an ATM.
Many exchange offices in airports or tourist areas advertise ” 0% commission ” or “no fees.” While this sounds great, don’t be fooled. These places often hide their profits behind an unfavorable exchange rate.
The trick is simple: instead of charging you a fee, they give you less local currency for each euro or dollar. So always analyze the real rate you’re being offered.
Tip: If the rate is much worse than what you see online, it’s best to look for another option.
It’s tempting to exchange money at the airport or in a hotel lobby for convenience, especially if you’re tired after a flight. But these places often offer the worst rates.
Why? Because they know travelers need money quickly and often don’t shop around. They take advantage of the urgency and location to charge you more. If you’re in Palma de Mallorca or any other tourist destination, it’s best to wait and exchange your money downtown or at trusted local exchange offices.
Tip: Use airport points only if absolutely necessary, and exchange only a small amount.
The best way to get a good exchange rate is to go to reputable exchange houses or reputable banks. These businesses often have more competitive rates, clearer fee structures, and greater transparency.
If you’re traveling to Spain, for example, a local office like Multi-Expert in Palma can offer you better value than a typical tourist kiosk. Check online reviews, compare rates before you go, and don’t hesitate to ask questions.
Tip: Avoid people on the street or unofficial businesses—they might give you counterfeit money or scam you.
Making the most of your money abroad starts with knowledge. By understanding what makes a “good” exchange rate and taking some basic precautions, you can avoid common mistakes.
Don’t rush. Compare rates. Check the average market rate. And whenever possible, choose reliable providers over flashy stalls in tourist areas. With a little attention, your money can go further, and you can spend it on experiences, not hidden fees.
