Jazmin Li
Currency exchange services are available at many international airports, including Washington Dulles International Airport. While exchanging currency at the airport is convenient, it may not be the most cost-effective option. Airport currency exchanges typically offer unfavourable exchange rates and may charge additional fees, resulting in a higher cost for travellers. Therefore, it is generally recommended to explore other options, such as ordering foreign currency from your bank before travelling or using ATMs or credit cards that offer competitive exchange rates and minimal fees. However, for last-minute needs or accessibility, airport currency exchange services can still be a viable choice for travellers, albeit at a potentially higher cost.
| Characteristics | Values |
|---|---|
| Convenience | 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 exchanges generally offer poor exchange rates and high fees, making them a costly option. |
| Alternatives | Ordering foreign currency from your bank before travelling, using a local currency exchange with better rates, or withdrawing cash from an ATM are often more cost-effective alternatives. |
| Credit Cards | Depending on your destination, you may be able to rely primarily on a credit card that does not charge foreign exchange fees. |
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What You'll Learn
Airport currency exchange is convenient but costly
It is recommended to explore alternative options for exchanging currency before resorting to airport exchanges. One suggestion is to order foreign currency from your bank before travelling. Most banks offer this service through their website or mobile app, allowing you to specify the desired currency and amount. While some banks may charge fees for this service, it is often possible to avoid these charges by picking up the cash at a local branch. Additionally, major banks often have branches abroad or partner with other banks, providing access to ATMs with decent exchange rates and eliminating out-of-network ATM fees.
If you are unable to order foreign currency in advance, consider using a currency exchange service in your city or destination country, as these often provide better exchange rates than airport kiosks. It is also worth noting that many countries accept credit cards widely, so carrying cash may not be necessary. However, it is essential to check if your credit card charges foreign exchange fees, as these can add up quickly.
Overall, while airport currency exchange is undoubtedly convenient, it comes at a cost. Travellers should carefully consider their options and plan ahead to ensure they get the best value for their money. A little research and preparation can go a long way in making your trip more financially feasible.
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Ordering currency from your bank is a better option
Currency exchange counters at the airport generally offer the worst exchange rates. They also charge additional fees on top of the poor exchange rate. Ordering foreign currency from your bank before you travel is a much better option. Most banks allow you to order foreign currencies, which you can typically pick up at a local branch before your trip. Some banks also offer to ship the currencies to you, and sometimes they don’t even charge extra for postage if you order a certain amount.
While the exact process varies by bank, most major banks make it easy to order online. Typically, you can access the currency exchange webpage through your bank’s website or mobile app, or by phone. From there, you usually enter the currency you need, add the desired amount, select the pickup method, and place your order. While you can generally expect a solid exchange rate, use a trusted source such as Reuters or the International Monetary Fund to find current exchange rates and ensure you get a fair deal.
There’s also generally a minimum amount of foreign currency you can order ($100 or $200 is common) and a maximum ($10,000 within a 30-day period is common). Additionally, understand all the fees involved. For example, Citi charges a $5 service fee for transactions under $1,000, though it’s waived for clients with premium bank accounts. Or you might get charged a shipping fee. Bank of America’s standard shipping costs $7.50, but overnight shipping is $20. Sometimes you can avoid shipping fees by opting to pick up the cash at a local branch or by being a loyal customer.
If it’s too late to order foreign currency from your bank, you can use an ATM to withdraw cash. Major banks usually have branches abroad or partner with other banks to create a network. Using those ATMs often provides a decent exchange rate while eliminating out-of-network ATM fees.
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ATM withdrawals can provide a decent exchange rate
Currency exchange counters at the airport generally offer the worst exchange rates. Ordering foreign currency from your bank before you travel is a better option. However, if you are unable to do this, ATM withdrawals can provide a decent exchange rate.
ATMs abroad with a debit card can be the next cheapest way to get local currency. When you spend abroad with your debit card issued by your home bank, you will have to convert your home currency into the local currency of your travel destination. Your card payment provider, such as MasterCard, Visa, or American Express, will do that conversion near the real mid-market exchange rate. Banks that are a part of the Global ATM Alliance provide free ATM withdrawals. All French banks provide ATM withdrawals for free, while banks in other countries, such as Spain and Italy, will charge €2-5 per ATM withdrawal.
It is important to note that banks often charge a foreign ATM withdrawal fee, also known as a currency conversion fee. This is usually a combined flat fee for using an ATM network, plus a percentage of the value of the withdrawn cash. This fee can sometimes be 0% depending on your card issuer. Additionally, a surcharge may be added by the ATM as a fee for using the machine. You will be notified of this on the ATM screen, and it will ask for your permission to proceed with the transaction. To avoid this, it is recommended to use ATMs at major banks or post offices, as smaller banks and independently owned ATMs have a higher risk of surcharges.
If you own a multi-currency debit card, then ATMs will use the real mid-market exchange rate and will not charge hidden fees. If you withdraw with a foreign debit card, then ATMs will give you the option to exchange at the real mid-market rate or at a weaker rate. Some banks and financial institutions add on a 'dynamic currency conversion' (DCC) fee, which allows the foreign ATM or merchant to do the currency conversion on your behalf. This will likely include significant fees which you may not be able to see in advance. Thus, it is best to pay in the local currency, as your home bank will be responsible for the currency conversion and will likely give you a fair exchange rate.
Overall, while ATM withdrawals can provide a decent exchange rate, it is important to be aware of the various fees that may be involved and to consider alternative options, such as ordering currency from your bank before you travel.
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Credit cards are a good alternative to cash
Currency exchange counters at the airport generally offer the worst exchange rates. It is recommended to order foreign currency from your bank before travelling, or to use a credit card.
Secondly, credit cards are more convenient than cash. You don't have to carry large amounts of money or change currencies as often. This is ideal for larger purchases like flights and hotels.
Thirdly, credit cards can offer better exchange rates than cash withdrawals from ATMs. Some credit card companies have partnerships with banks abroad and offer lower (or zero) foreign transaction fees, especially for credit cards intended for travel.
However, it is important to note that some smaller international merchants operate cash-only businesses, so it is a good idea to carry some local currency when travelling. Additionally, some credit card transactions require ID verification, so it is recommended to carry your passport with you at all times when travelling. Before travelling, it is also important to call your card-issuing bank in advance and let them know about your travel plans, otherwise your credit card could get flagged for suspicious activity.
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Currency exchange rates vary by place and currency
The exchange rate is the value at which one currency can be exchanged for another. It is the value of a nation's currency when traded for another currency. The real exchange rate (RER) is the purchasing power of a currency relative to another at current exchange rates and prices. It is the ratio of the number of units of a given country's currency necessary to buy a market basket of goods in the other country.
Some countries have restricted currencies, meaning they restrict the exchange of their currency to within their borders or establish both an onshore and an offshore rate. For a handful of countries, it's straightforward: these countries pick a commonly used currency, usually the US dollar or the euro, and "peg" their currency's exchange rate to this currency. For example, Belize's central bank decided its currency would be worth one-half of a US dollar. Such currencies are called fixed or pegged.
Most exchange rates, however, are not fixed and are "floating," meaning their values constantly change depending on various economic factors. Changes in exchange rates can affect businesses by increasing or decreasing the cost of supplies and finished products purchased from another country. It changes the demand abroad for their exports and the domestic demand for imports.
When exchanging currency, it is generally advised to avoid airport currency exchange counters as they offer the worst exchange rates. Ordering foreign currency from your bank before travelling is a better option.
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Frequently asked questions
Yes, many airports have currency exchange kiosks and counters located within their terminals, making them easily accessible to travellers.
Yes, you can exchange currency at your local bank branch before you leave for your trip, or at a bank branch abroad. You can also use an ATM to withdraw foreign currency with your credit/debit card, or use your card for purchases directly.
Exchanging currency at the airport is convenient, especially if you need to make a last-minute transaction before departure or after landing.
Airport currency exchanges typically offer poor exchange rates and charge high fees.
It's a good idea to research the current exchange rates and understand any associated fees. Ordering currency from your bank in advance or using an ATM abroad may provide better exchange rates and lower fees. Additionally, consider the amount of cash you will need during your trip, as exchanging small amounts may incur higher relative fees.
