Jazmin Li
Airports are designed to cater to the needs of holidaymakers and international travellers, including providing them with somewhere to exchange their currency before their travels. However, while airport currency exchange counters are convenient, they generally offer the worst exchange rates. It is not uncommon for airport exchanges to charge 14% more than the current International Monetary Fund (IMF) exchange rate, with some premiums exceeding 17%. Ordering foreign currency from your bank before you travel is almost always better, as the exchange rates are usually quite good.
| Characteristics | Values |
|---|---|
| Accessibility | Currency exchange kiosks and counters are conveniently located within airport terminals, making them easily accessible just before departure or immediately after landing. |
| Cost | Airport currency exchange rates are typically unfavourable and may include additional fees. |
| Convenience | Exchanging money at the airport is convenient, especially if you need cash upon arrival to order a cab or tip. |
| Alternatives | Ordering foreign currency from your bank before travelling is often a better option. Using credit cards for larger purchases and withdrawing cash from ATMs abroad are other alternatives. |
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What You'll Learn
Pros and cons of exchanging money at the airport
Pros of exchanging money at the airport
Airport currency exchange services offer unparalleled convenience. Currency exchange kiosks and counters are conveniently located within terminals, making it easy to access them just before departure or immediately after landing. This eliminates the need to hunt for currency exchange services in an unfamiliar city. They are a good last resort if you haven't had the chance to exchange money before your trip, allowing you to obtain local currency immediately. Airport exchange counters typically offer a wide range of currencies, which can be particularly useful if you are travelling to multiple countries or less common destinations.
Cons of exchanging money at the airport
The biggest downside of exchanging currency at airports is the unfavourable exchange rates. Airport currency exchange services often charge a premium for the convenience they provide, which can significantly reduce the foreign currency you receive, especially when converting large sums of money. Airports charge extra to cover operational costs, making the rates less competitive. Travellers often exchange money at airports out of necessity, leading to higher markups. Airports are typically busy environments, and travellers are often pressed for time. This urgency can make comparing rates and fees between different exchange kiosks difficult, leading to less favourable deals. In addition to higher exchange rates, many airport currency exchange services impose service fees or transaction charges, further eroding the value of your money.
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Alternatives to exchanging money at the airport
Exchanging money at the airport is convenient, but it comes at a cost. Airport currency exchange counters generally offer the worst exchange rates. They may charge up to 17% more than the current International Monetary Fund (IMF) exchange rate, along with additional fees.
Order Currency from Your Bank
Ordering foreign currency from your bank before your trip is a good alternative. Most banks allow you to order foreign currencies, which you can typically pick up at a local branch. Some banks may even ship the currencies to you without an extra charge. Banks usually offer better exchange rates than airport counters. For example, Bank of America's exchange rates average roughly 6% more than the IMF rates, which is still much lower than airport exchange rates.
Use Mobile Payment Providers
Mobile payment providers such as Google Pay, Android Pay, or Apple Pay can be used as alternatives to exchanging currency. However, be cautious when using mobile apps to transfer money in foreign countries, especially in certain regions like the Eastern Bloc or some countries in Asia. Avoid downloading country-specific mobile applications for financial services as they may carry additional risks.
Use Credit Cards, Prepaid Cards, or US Dollars
Using credit cards, prepaid cards, or even US dollars for purchases can be a good alternative to exchanging currency.
Exchange Currency Before Your Trip
Exchanging currency at locations like train stations, hotels, or tourist areas is another option. However, these spots tend to be more expensive than banks.
Use a Money Transfer App or Travel Money Card
If you haven't had time to exchange currency in advance, consider using a money transfer app or travel money card to find a better exchange rate.
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How to get the best deal on money exchange
While exchanging money at the airport is convenient, it is not the best option if you want to get a good deal. Airport currency exchange counters generally offer the worst exchange rates. Here are some tips on how to get a better deal when exchanging money:
- Order currency from your bank before you travel. Most banks allow you to order foreign currency, which you can typically pick up at a local branch before your trip. Some banks may also ship the currency to you, sometimes for free if you order a certain amount. Bank exchange rates are usually quite good.
- Compare exchange rates. Currency conversion rates differ between companies, and each company manipulates the interbank rate to make a profit. Use a trusted source such as Reuters or the International Monetary Fund to find current exchange rates and ensure you get a fair deal.
- Understand the spread. The spread is the difference between the buy rate and the sell rate. Institutions generate profit by applying this spread. Understanding the spread can help you identify whether you're getting a fair rate or being charged excessively.
- Compare fees. Different providers may charge various fees on top of the poor exchange rate. For example, some banks may charge a service fee for transactions under a certain amount, while others may charge a shipping fee.
- Use online currency exchange services. With the rise of fintech, online platforms like Wise (formerly TransferWise), OFX, and Revolut often provide better rates and lower fees than banks or airport kiosks.
- Set up exchange rate notifications. Some services allow you to set up notifications so that you can send money at the best time.
- Research local customs. In some countries, it's acceptable to negotiate rates at currency exchange kiosks, while prices are fixed in other places.
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Exchanging foreign currency in your home country
Exchanging currency at the airport is generally not recommended due to poor exchange rates and high fees. It is advisable to plan ahead and exchange your money before travelling, either through your bank or a local credit union. Many banks allow you to order foreign currency in advance, which you can then pick up at a local branch. Some banks may even ship the currency to you, and you may not be charged extra for postage if you order a certain amount.
If you have foreign currency left over after your trip, it is usually best to avoid exchanging it at the airport. You could consider keeping it for your next trip, spending it at the airport, donating it, or saving it as a souvenir. If you do want to exchange it, it is worth checking the exchange rates in your home country first. Sometimes, exchanging foreign currencies in your home country can result in lower rates. Your bank or credit union may be able to exchange the currency for you, but be aware that some banks will not accept all foreign currencies.
If you are in the US, your bank will probably exchange your leftover foreign currency for free. You could also consider ordering foreign currency before you fly. Bank of America, for example, offers discounted exchange rates of up to 2% for Preferred Rewards clients, as well as free standard shipping for orders placed online or through their mobile banking app. Wells Fargo also offers foreign exchange services, although they set their own exchange rates, which may differ from those seen elsewhere.
Overall, it is generally recommended to avoid exchanging currency at the airport, both when travelling abroad and when returning to your home country. Planning ahead and using your bank or a local credit union are often the best options for getting a good exchange rate and avoiding unnecessary fees.
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How to handle leftover foreign currency
When returning home from a trip abroad, you may find yourself with some leftover foreign currency. Here are some options for what to do with it:
Spend it before you leave
A practical way to handle leftover foreign currency is to try and spend it before you depart. Switching to cash spending near the end of your trip can help with this. You can use the leftover currency to cover costs such as hotel bills, meals, transportation, or shopping. Some hotels allow you to split your bill, paying part of it in cash and the rest with a credit card. Additionally, duty-free stores at the airport may accept foreign currency, but this varies by country.
Exchange it at the airport
International airports usually have currency exchange counters or kiosks that can convert your leftover foreign bills and coins into your home currency or that of your next destination. However, airport exchange rates are often unfavourable and come with additional fees. Some exchanges may not accept coins, and it is generally more cost-effective to exchange your currency at a bank or through a trusted online service.
Exchange it at a bank
Exchanging your leftover foreign currency at a bank often provides better rates than airport exchanges. You can typically order the desired currency from your bank before travelling and pick it up at a local branch. Some banks may also offer to ship the currency to you, sometimes with waived postage fees for certain amounts. When returning with leftover currency, banks may exchange it for your home currency or deposit the funds directly into your account.
Donate it to charity
Some airports have collection boxes or envelopes where you can deposit your spare change for charities and organisations like animal rescues and child hospitals. Airlines may also have partnerships with charities, allowing you to donate your leftover currency during the flight or by mailing it to the organisation. UNICEF, for example, accepts foreign currencies as part of its Change for Good program.
Sell it online
If you have rare or old currency, you might consider selling it on an online marketplace or a specialised currency exchange website. Collectors may be interested in unique or obscure banknotes and coins, which can fetch a decent price.
Keep it as a souvenir
Foreign coins and banknotes can serve as unique souvenirs from your travels, especially if you find the currency aesthetically pleasing.
Remember to consider exchange rates, fees, and convenience when deciding how to handle your leftover foreign currency. Planning ahead can help you make the most of your money and avoid unnecessary costs.
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Frequently asked questions
Yes, many international airports have currency exchange kiosks and counters in the terminal, making it easy to access them before departure or after landing.
Exchanging money at the airport is convenient but comes at a cost. Airport currency exchange rates are among the worst you'll find, with some airports charging 14% more than the current International Monetary Fund (IMF) exchange rate.
You can order foreign currency from your bank before you travel. Your bank will usually offer the best combination of exchange rates and low fees, especially if you are an account holder.
Successful travellers typically combine several methods: bank-ordered currency for immediate needs, credit cards for larger purchases, and knowledge of local ATM networks for additional cash.
