How to Minimize the Costs of Changing Money

Exchanging money for international poker tournaments can be expensive. You need a large amount of foreign currency, and the rates that casinos, banks, and exchange services give you are never good. If you don't know someone willing to sell you currency, you're stuck paying a significant premium before you even buy into the tournament.

With a few big stops outside the U.S. coming up this month (i.e. Barcelona, Montreal, Monte Carlo), I thought I'd share my method of avoiding the fees associated with changing money. The good news is that there is an independent and reliable way to get large amounts of foreign currency at near-market rates almost no matter where you go, and it involves getting the money you need through ATM withdrawals.

Withdrawing the money you need through ATMs makes sense because these transactions give you by far the best rate. When a foreign currency charge hits your checking account, it's automatically converted to USD at a vig of roughly 0.5%. There can also be ATM fees, but they pale in comparison to what you'd be paying otherwise - a vig of several percent by any other method. In addition, some checking accounts will waive the ATM fees altogether.

A few caveats to this approach:

• This won't help people playing super high stakes much. For everyone else, you'll be able to take out several thousand dollars worth of foreign currency per day, but you'll need at least a few different checking accounts with healthy balances. You should also ask your bank if/when you can raise your ATM limits.
• These checking accounts mustn't charge foreign transaction fees. These fees can be up to 3% of the withdrawal amount, and will erase a ton of the money you're saving. See below:

HIGH FOREIGN TRANSACTION FEES ✖

Bank of America

Chase
US Bank
CitiBank (<$200k balance)

LOW FOREIGN TRANSACTION FEES
Ally
USAA

OFFERS NO FOREIGN TRANSACTION FEES ✔

Wells Fargo

OFFERS NO FOREIGN TRANSACTION FEES AND ATM FEE REFUNDS ✔✔

TD Bank
Charles Schwab
Capital One 360

PNC

(Note that you'll need the correct type of checking account and meet its requirements. Inquire with your bank. More info here)

• If the ATM gives you the option to charge your checking account in USD or the local currency, ALWAYS choose the local currency. The ATM will use its own exchange rate if you choose USD, and this rate is sometimes the worst of all possible options.

As an example, during my last trip to Montreal the casino's exchange rate was 1.230, but withdrawing by ATM came to a rate of 1.266 (for reference, the market rate was 1.273). By paying a vig of 0.5% instead of 3.4%, I saved $89 USD on each $3k buyin.

Now, on the flip side, if you have a big score and want to change foreign currency to USD, you'll want to be smart about how you do that too. Selling it to other players is the best option if possible, but if that doesn't work for you your other options aren't great. Exchanging cash with a casino or bank is a rip off, and your bank will charge you a vig of a few percent for converting an incoming foreign currency wire. For large five-figure and six-figure scores, this can amount to quite a bit.

I encountered this problem after I final tabled an event in Ireland a few years ago. What I ended up doing - and what you can do too - is I opened a free brokerage account with Fidelity that can hold balances in multiple currencies. I had the money wired there, and after it hit I traded it for USD at great rates right through the Fidelity website. From there, the last step was just to wire out the dollars from Fidelity to my personal bank account.

While there is some work involved in this process, the money you save by consistently exchanging money at the best possible rates is not insignificant, and that goes double for traveling tourny pros. I encourage anyone who thinks they will end up exchanging foreign currency with casinos, banks, or exchange services to try this method out, if only to supplement what they're doing now. I'll do my best to answer any questions you may have on Twitter @miw210