Using a debit card can save you money.
Generally, you lose a little bit of money when you exchange currencies. However, losses and gains depend on who you exchange through, how you exchange currency and your perspective.
Banks and ATMs
If you are taking foreign currency out of an ATM or exchanging currency at a bank, you are exchanging currency at a rate slightly lower than market price, and you may be charged a service fee. Banks use slightly lower rates because they trade in high volumes on the international market, which involves paying salaries, fees and taxes, and they try to recoup those operational costs in part by charging you 1.32 dollars per euro instead of the published rate of 1.30.
Commercial Exchanges
In many places --- border crossings, capital cities with many foreigners --- commercial exchange houses offer rates that are much closer to the published market rate than what your bank may offer you (likewise, cash usually draws better rates than traveler's checks or your debit card). However, commercial exchanges far from the country whose currency you hold or airport exchanges give you very low rates, usually as a built-in convenience fee.
Appreciation
However, depending on timing and perspective, you can sometimes make or save money through currency exchange. For example, let's say you exchange 1,300 dollars for 1,000 euros at the beginning of a trip. If the exchange rate increases by .01 percent every day for the rest of the week and you only spend what you exchanged, you've saved money by not taking out money every day (of course, the opposite can also happen). Similarly, if you have 200 euros left over and decide to save them for your next trip, you can make (or at least save) money if euros become more expensive in terms of dollars.
Considerations
Different banks charge different rates and fees for using foreign ATM machines or using your card to make purchases in a currency other than your national one. If you travel on a regular basis, comparing the fees and rates charged by different banks may be a prudent financial move. Likewise, transaction fees may affect when and how you exchange money.
Types of Money
Different forms of money receive different exchange rates. Cash is by far the easiest and generally carries the most favorable exchange rate, though it has the downside of being lost forever if stolen. Cash accessed through debit or credit cards usually carries a rate similar to physical cash, and offers a modicum of protection. Traveler's checks are the safest option, but the vast majority of institutions will charge a commission on top of an unfavorable exchange rate.
