Between exchange fees, foreign transaction fees, and every other nickel-and-diming scheme out there, exchanging money can be expensive.

So what’s the best way to exchange your money abroad?

Well, rule number one is, do NOT exchange your money at the airport. In fact, don’t change your money at ANY exchange counter or you’ll get nailed by fees and commissions.

If you use your credit or debit card, remember that Visa and MasterCard will likely charge you a one percent foreign transaction fee, and your issuing bank will add another two percent to that.

The way to get around that is to stick with lower-fee banks. Capital One doesn’t charge a foreign transaction fee. American Express doesn’t charge at all if you use your debit card, while Wachovia charges two percent on credit card purchases and one percent for debit card purchases.

Remember, when you take your money out of an ATM, you’re likely to get hit with a double-whammy. So to get around that, see if your bank has foreign alliances. Bank of America has a no-fee ATM agreement with Barclay’s in the U.K., Deutsche Bank in Germany, and Scotia Bank in Canada.

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