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This is untrue.

For tourists and Visa/MasterCard paying with a card is usually cheaper than withdrawing foreign cash at ATM.

With ATM you are slapped with a foreign withdrawal fee and you usually get worse exchange rate.

Depends on your credit card: it's not uncommon for them to also slap you with foreign transaction fees of 3% or higher.

In general, the hierarchy of fees is no-fee CC < regular CC < ATM withdrawal < exchange cash at destination < exchange cash somewhere else.

Not sure why you're being downvoted. Some (but not all) of my American credit cards charge an explicit 3% foreign exchange conversion fee on top of whatever exchange rate they give you. It can happen even if the transaction is denominated in US dollars.

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