The rates are always terrible, they have to make money. It probably equals out over time but having the freedom to withdraw smaller amounts without an extra charge is convenient. I am not a great fan of carrying around a lot of cash.
Agreed, and that's how I do it also. But I'd recommend checking the rate. I have a few accounts and the difference between the cheapest and most expensive is significant (e.g. one bank taking 4% margin, another only taking 1%).