Lois Larson
Airports are a convenient place to exchange currency, but they also tend to be the most expensive. Airport currency exchange rates are among the worst you'll find, with some kiosks charging hidden fees within their poor exchange rates. If you can, it's best to plan ahead and exchange your money before you travel. Most banks will exchange USD for foreign currencies, and you can typically pick up the cash at a local branch before your trip.
| Characteristics | Values |
|---|---|
| Convenience | Airports are easily accessible and convenient for currency exchange. |
| Accessibility | Currency exchange kiosks are available at the airport. |
| Exchange rate | Airports typically offer poor exchange rates, with some charging 14% more than the current IMF rate. |
| Fees | Airport kiosks may charge higher fees, which are sometimes hidden within poor exchange rates. |
| Alternatives | Ordering currency from your bank before travelling is a better option. |
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What You'll Learn
Airports have poor exchange rates and high fees
Airports are a convenient place to exchange currency as they are easily accessible and can be a lifesaver if you've run out of time before your trip. However, they are also known for their poor exchange rates and high fees.
Airport exchange desks set their own exchange rates, which are usually higher than what you'd find elsewhere. This is because they know travellers often need to exchange currency at the last minute, so they can charge more for the convenience. The rates at airports are influenced by market trends, demand, and service provider fees, and can be 10-15% higher than standard market rates. This means that travellers could be losing out on a significant amount of money.
In addition to poor exchange rates, airport currency exchanges also charge extra fees. These fees can be a fixed amount or a percentage of the amount being exchanged, and are used to cover the high costs of operating at an airport, such as rent and staff salaries. These fees, combined with the poor exchange rates, mean that exchanging currency at an airport can be an expensive option.
To get a better deal, it is recommended to plan ahead and exchange currency before arriving at the airport. Ordering currency from your bank or using a trusted online service can often provide better exchange rates and lower fees. Using a credit card without foreign transaction fees or a prepaid travel card can also be a good alternative to exchanging currency at the airport. By being proactive and doing some research, travellers can avoid the poor exchange rates and high fees often associated with airport currency exchanges.
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Order currency from your bank before travelling
It is generally recommended to order currency from your bank before travelling, as this can save you money and maximise the amount of foreign currency you receive. Here are some reasons why you should consider ordering currency from your bank before your trip:
Convenience
Ordering currency in advance means you will have cash on hand for immediate expenses, such as taxis and tips, and you can avoid potentially long airport lines when exchanging currency upon arrival.
Better exchange rates
You can often lock in a more favourable exchange rate before your trip and avoid the high fees associated with airport or local exchanges. It is worth checking your bank's exchange rate to ensure it is optimal before initiating the transaction. You can use a trusted source such as Reuters or the International Monetary Fund to find current exchange rates and ensure you get a fair deal.
Peace of mind
By ordering currency in advance, you won't have to worry about finding ATMs or foreign banks in an unfamiliar place. You can also get familiar with the local currency before you leave, which can help you avoid being shortchanged.
Lower fees
Ordering currency from your bank before departure can help you avoid paying ATM transaction costs and may result in a better exchange rate. Some banks may also waive fees for premium account holders.
Safety
Carrying your entire trip budget in cash creates unnecessary risk. By ordering currency in advance, you can reduce the amount of cash you need to carry and use a mix of payment methods, such as a credit card with no foreign transaction fees for larger purchases.
Overall, ordering currency from your bank before travelling can save you time, money, and hassle. It can also give you peace of mind and help you make the most of your trip by maximising your spending power.
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Use a credit card, prepaid card or USD for purchases
When travelling, it is important to have a good understanding of how you will be accessing your money. Using your credit card, prepaid card or USD for purchases can be a good alternative to exchanging currency. Here are some tips for using these payment methods while travelling:
Credit Cards
Using a credit card is a convenient way to pay for purchases while travelling. It is safer than carrying a lot of cash, and most cards offer protection from unauthorized use. Additionally, if you lose your debit card, you can use your credit card at an ATM to get a cash advance, although there may be fees involved. When using a credit card, be aware of foreign transaction surcharges, which can add up to 3.5% to purchases and ATM withdrawals.
Prepaid Cards
Prepaid cards are a great alternative to carrying cash or using a credit card. They are similar to regular debit cards but offer more security and can often provide better exchange rates and lower fees. With a prepaid card, you can load foreign currency onto the card before your trip, locking in the exchange rate and avoiding surprise fees. Prepaid cards are widely accepted and can be used to make purchases and withdrawals at ATMs. Some popular options include the Wise Multi-Currency Card, Western Union Netspend Card, and prepaid cards from PayPal and Visa. However, be aware that some prepaid cards come with monthly or transaction fees.
USD for Purchases
In some countries outside of the Eurozone, USD is commonly accepted, although you may get a poor exchange rate. If you are only visiting for a short time, using USD can be a convenient option, but if you are staying longer, it is better to use the local currency.
General Tips
- Always notify your bank or credit card company of your travel plans to avoid any blocks or holds on your account.
- Be cautious when using mobile apps or text-based payment services in foreign countries, as there may be additional security risks.
- Spend your coins before leaving a currency zone, as they may be worthless in the next country.
- Avoid dynamic currency conversion (DCC) when given the option to pay in your home currency, as this often results in higher fees and inflated exchange rates.
By following these tips and utilizing credit cards, prepaid cards, or USD for purchases, you can effectively manage your finances while travelling.
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ATM transactions can be costly
While ATMs are convenient, allowing consumers to perform quick self-service transactions, ATM transactions can be costly. Here are some reasons why:
ATM Fees
Banks often charge fees for using out-of-network ATMs. These fees can include a flat fee, a percentage-based fee, or both. For example, Bank of America charges a $5 fee for withdrawing money from a foreign ATM, compared to a $2.50 fee at one of their own ATMs. They also charge a 3% foreign transaction fee, and you may incur an additional fee from the ATM provider. These fees can add up quickly, especially if you are travelling for an extended period or frequently use out-of-network ATMs.
Exchange Rates
Using an ATM abroad can also be more expensive due to unfavourable exchange rates. Airports, in particular, tend to offer poor exchange rates, so it is best to avoid exchanging currency or withdrawing cash from ATMs at airports.
Daily Withdrawal Limits
Banks limit the amount of cash you can withdraw from an ATM each day, and this amount can vary by institution and account type. This may cause issues if you need to withdraw a large sum of money in a short period.
International Transaction Fees
Banks often charge a fee for using an ATM outside of your home country, typically ranging from 1% to 3% of the transaction amount. These fees can be difficult to avoid when travelling, but you can minimise them by speaking with your bank beforehand to understand the fees and plan accordingly.
To avoid costly ATM transactions, it is recommended to use your bank's ATM network where possible and to consider using a credit card or prepaid card for purchases instead of withdrawing cash. Additionally, exchanging some currency at your local bank before travelling can help cover immediate expenses upon arrival, such as tipping or buying a meal.
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Banks offer the best exchange rates
Currency exchange kiosks at airports tend to offer unfavourable exchange rates and high fees, as they are aware that travellers often have no other options. It is recommended to plan ahead and exchange currency before reaching the airport. Banks and credit unions are often the best places to exchange currency before a trip, especially if you are an account holder.
Major banks typically offer currency exchange services at lower fees than currency exchange kiosks, and some banks may even waive fees for premium account holders. Banks will usually charge a transaction fee for exchanging currency, which can be a flat fee or a variable fee depending on the amount and type of currency. Some banks have minimum exchange amounts for foreign currencies, so it is important to contact your bank in advance to confirm the requirements.
Online currency exchange services are generally safe, especially if they are offered by banks or credit unions. It is always a good idea to research the service and read reviews before exchanging currency. Some non-bank providers like Wise, Revolut, and CXI offer online currency exchange services with low or no fees.
When choosing where to exchange currency, it is important to compare currency exchange rates locally to see which financial institution offers the best rate. Major banks often post their exchange rates online, allowing for easy comparison.
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Frequently asked questions
Yes, you can convert USD to Euros at the airport. However, it is not recommended as airport kiosks tend to charge higher fees and offer poor exchange rates.
You can convert USD to Euros at your local bank before your trip. Most major banks allow you to order foreign currencies, which you can pick up at a local branch.
The best way to exchange currency is to plan ahead. Ordering currency from your bank before your trip is better than using airport currency exchange. Check your bank's exchange rate to make sure it's fair and avoid paying high currency exchange fees.
Yes, there are alternatives to exchanging currency. Using your credit cards, prepaid cards, or even USD for purchases can be good alternatives to exchanging currency.
