If money makes the world go round, shouldn't it be easier for vacationers to buy some at a decent exchange rate?

These days, ATMs and credit-card machines are popping up even in the most remote rug bazaars. However, it's getting harder to figure out the cheapest way to pay for something in a foreign currency. While the difference between using plastic and cash from a currency exchange amounts to pennies on the U.S. dollar, they can add up quickly.

The fee structure for overseas credit-card use seems as confusing as ever. Just last month, a California judge scolded Visa and MasterCard for not properly disclosing the extra fees that get tacked onto cardholders' charges while traveling abroad. These foreign exchange fees can add up to 3% to the cost of the couscous you ate after carpet-shopping

To see how the fees work, we headed to Australia, where we bought four identically priced boomerangs with four different cards. We also changed a few bucks at the counter in our hotel, fully expecting to be ripped off. Then we plugged in our Chase debit card into an ATM a few feet away.

The results surprised us. For one thing, we got a decent deal at the hotel -- although we suspect it was because the staff thought we were an off-duty employee, as opposed to a hotel guest. It turns out that the only people who routinely exchange tiny amounts of cash there are maids and bellboys (who get foreign currency tips). Custom House (an international chain of currency exchanges), at least in our hotel, doesn't hit them with big service charges.

So when we stopped by to exchange $10, the clerk didn't levy any service charges. In fact, Custom House's going rate would have been the worst deal of all. It usually charges a flat $5, which, on our puny $10 transaction definitely wouldn't have been a bargain. By comparison, the most expensive credit card we used hits you with only a 3% fee.

However, if you are changing a big pile of money -- say, $500 -- the hotel's flat fee is a much better deal than the credit card. (At 3%, the card hits you with a $15 fee, or triple what Custom House charges.

Lesson: Pay attention to whether local currency exchanges charge a flat fee or a percentage of your transaction -- and change money with that in mind. A few dollars here and there, and over the course of several weeks abroad, it makes a huge difference.

Spend enough using the Visa and MasterCard we brought and you'll definitely notice. Both the Chase MasterCard debit card and a Citibank AAdvantage Visa we used got the worst rates by tacking on at least 3% in fees.

True, the difference between our worst deal and the best one on our $20 boomerangs amounted to only a dollar or so. Had we been attempting to outfit the entire Australian national team with 500 boomerangs, however, it would have been a difference of $130. For vacationers spending thousands of dollars, the savings can add up.

At least the customer-service representatives at the card companies were forthright about their fees, with the exception of the Chase rep, who didn't know they existed.

While American Express had the best rate in this test, other consumers have flunked it in their own trials. John Wasserlein, a retired executive in Rye, N.H. pitted his AmEx card against a Quantum MasterCard issued by Bank of New Hampshire on a recent European tour. The result? The Quantum MasterCard offered a better deal by an average of 1.87%.

• Cranky about customer service? Write us at Cranky@wsj.com.