Jazmin Li
Airports are a convenient place to exchange currency, with many major airports offering currency exchange services. However, it is not always the best option. Currency exchange rates at airports are often unfavourable, with some charging up to 14% more than the current International Monetary Fund (IMF) rate. As such, it is recommended to research exchange rates and plan ahead before exchanging large amounts of money at the airport. Ordering foreign currency from your bank before travelling is often a better option, although this may not be possible for currencies with restrictions.
| Characteristics | Values |
|---|---|
| Should you exchange currency at the airport? | Exchanging currency at the airport is convenient but it is not recommended due to poor exchange rates and long lines. |
| Alternatives to exchanging currency at the airport | 1. Order foreign currency from your bank before you fly. 2. Withdraw money in the local currency from an ATM. 3. Use your credit cards, prepaid cards or U.S. dollars for purchases. |
| Tips for exchanging currency | 1. Check the exchange rates online before exchanging your money. 2. Avoid exchanging currency at banks unless you have an account with them. 3. Spend your coins before leaving a currency zone. |
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What You'll Learn
- Airport kiosks have poor exchange rates and high fees
- It's better to order currency from your bank before travelling
- Use your bank's ATM network abroad for competitive exchange rates and low fees
- Avoid exchanging currency at hotels and tourist areas
- Use your credit card for purchases instead of exchanging currency
Airport kiosks have poor exchange rates and high fees
Airport kiosks are convenient for exchanging currency, but they often have poor exchange rates and high fees. These exchange rates can be 10-15% higher than standard market rates, with some premiums exceeding 17%. Airports charge extra to cover their operational costs, such as steep rents and staff salaries, which results in higher exchange fees for consumers.
It is recommended to avoid exchanging currency at the airport whenever possible. Instead, consider ordering foreign currency from your bank before you travel, as they typically offer better exchange rates and lower fees. Most major banks allow you to order foreign currency online or through their mobile app, and you can usually pick it up at a local branch before your trip.
If you need cash upon arrival, it is still better to withdraw money from an ATM at your destination airport than to use a currency exchange kiosk. ATMs typically offer better exchange rates and lower fees, but be sure to research any additional charges your bank may impose for international withdrawals.
Additionally, using your credit or debit card for purchases and withdrawals in the local currency is often the best option, as it allows your bank to handle the currency conversion for you. Dynamic Currency Conversion (DCC) should be avoided, as it offers unfavourable exchange rates.
By planning ahead and utilizing alternative options, you can avoid the poor exchange rates and high fees associated with airport kiosks and make the most of your travel budget.
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It's better to order currency from your bank before travelling
It is better to order currency from your bank before travelling, as it saves you the hassle of waiting in long airport security lines to exchange currency. Airport currency exchange rates are also typically very poor, with some charging 14% more than the current International Monetary Fund (IMF) exchange rate.
Ordering currency from your bank before you travel is a more convenient option. You will have cash on hand for immediate expenses, such as taxis and tips, and you can avoid the inconvenience of finding ATMs or foreign banks in a new place. You can also get familiar with the local currency before you land.
Most major banks allow you to order foreign currency online, by phone, or in person at a local branch. You can generally expect a solid exchange rate, but it is worth checking a trusted source such as Reuters or the IMF to ensure you get a fair deal. Bank of America, for example, offers exchange rates that are roughly 6% more than the IMF rates, which is still less than half of what airport currency exchanges are charging.
It is also worth noting that some banks charge additional fees on top of the exchange rate. For instance, Citi charges a $5 service fee for transactions under $1,000, and Bank of America charges $7.50 for standard shipping. However, these fees can often be waived if you are a loyal customer or have a premium account.
To make the most of your trip and your money, it is recommended to have a combined approach. Order enough cash to cover your first few days, then use a credit card with no foreign transaction fees for major purchases and bank ATMs for additional cash.
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Use your bank's ATM network abroad for competitive exchange rates and low fees
When travelling abroad, it is often recommended to use your bank's ATM network to withdraw cash in the local currency. This is because airport currency exchange counters typically offer poor exchange rates and charge additional fees on top. By withdrawing cash from an ATM, you can often get a better exchange rate and avoid excessive fees.
It is important to note that many banks charge higher fees for international withdrawals. These fees can be a flat rate or a percentage of the total withdrawal amount. Additionally, some banks also charge a 'conversion fee' for foreign ATM withdrawals. Therefore, it is advisable to research your bank's fees and exchange rates before travelling.
To find ATMs with competitive exchange rates and low fees, consider using ATMs at major banks or post offices. Smaller banks and independently owned ATMs may have higher surcharges. You can also look for ATMs that are part of your bank's global network, as some banks partner with other banks to reduce or waive international withdrawal fees.
Another option is to open a multi-currency account with a digital bank before your trip. This allows you to access multiple currencies from a single account and avoid unfavourable exchange rates. Companies like Wise and Revolut offer multi-currency accounts with low fees.
Finally, when withdrawing cash from an ATM, always choose to pay in the local currency. If you choose to withdraw in your home currency, you may receive a poor exchange rate. By following these tips, you can use your bank's ATM network abroad to get competitive exchange rates and minimise fees.
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Avoid exchanging currency at hotels and tourist areas
When it comes to exchanging currency, it's generally best to avoid doing so at hotels and tourist areas. These locations tend to charge higher fees and offer less favourable exchange rates compared to other options. Here are some reasons why you should avoid exchanging currency at hotels and tourist areas, and some alternative suggestions.
Firstly, hotels and tourist-centric areas may offer convenience, but they often come with a price. The exchange rates in these areas are typically higher than other locations, and you may end up paying more for the same amount of currency. For example, some stores may advertise that they "accept dollars", but the exchange rate they use may be unfavourable, resulting in you paying up to 20% more for your purchase.
Secondly, by exchanging currency at hotels or tourist areas, you may be limiting your options. These locations may not offer the same variety of currencies as other exchange services, and you may find yourself needing to exchange money multiple times to get the currency you need.
Additionally, exchanging currency at hotels or tourist areas can be less secure. Carrying large amounts of cash can make you a target for theft or pickpocketing, especially in busy tourist areas.
Instead of exchanging currency at hotels or tourist areas, consider the following alternatives:
- Order foreign currency from your bank before you travel. Most banks offer this service, allowing you to pick up the desired currency at a local branch.
- Use a credit card or prepaid card for purchases. Credit cards often offer good exchange rates and provide protection on your purchases. Prepaid cards can also be loaded with multiple currencies and used for purchases or ATM withdrawals.
- Withdraw cash from ATMs once you arrive at your destination. Airport ATMs tend to have better exchange rates than exchange kiosks, and you can avoid carrying large amounts of cash.
- Use a currency converter or online bureau to exchange money. These services often provide convenient and inexpensive currency exchange, and you can do it from the comfort of your home.
- If you have leftover foreign currency after your trip, consider exchanging it back at your bank or credit union. They may offer better rates than airport kiosks or stores.
Remember to always plan ahead, research current exchange rates, and compare fees to ensure you're getting the best deal when exchanging currency.
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Use your credit card for purchases instead of exchanging currency
When travelling, it is advisable to use your credit card for purchases instead of exchanging currency. This is because exchanging currency can be expensive, with travellers losing about 5 to 10% when converting dollars to euros or other foreign currencies. Airport exchange counters are known to charge high fees, with rates that can be 14% more than the current International Monetary Fund (IMF) exchange rate. Some even charge additional fees on top of the poor exchange rate.
Using a credit card with no foreign transaction fees and choosing to make purchases in the local currency is a more cost-effective option. Credit cards convert international transactions at the current exchange rate, which is typically based on a globally recognized floating rate. While there may be some situations where it makes sense to use dynamic currency conversion (DCC), it is usually better to pay in the local currency, especially if you are using a credit card that does not charge foreign transaction fees.
If you need cash upon arrival for transportation or other expenses, consider ordering foreign currency from your bank before you fly. Most banks allow you to order foreign currencies, which you can typically pick up at a local branch before your trip. Alternatively, you can withdraw cash from an ATM at your destination, but be sure to research ATMs in your card's network ahead of time to find fee-free options.
It is important to note that credit card transaction fees can add up, so be cautious when using your card abroad. Always carry a backup source of funds in case of emergency, such as travel insurance and enough cash to get by for a few days. Additionally, be aware of potential scams, such as individuals approaching you on the street offering to exchange money at a better rate than a bank. It is safer to go through an authorized agency or bank for currency exchange.
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Frequently asked questions
Yes, you can exchange USD for euros at the airport. However, the exchange rates are often quite poor, with some airport exchanges charging up to 17% more than the current International Monetary Fund (IMF) exchange rate.
You can order foreign currency from your bank before you travel, or use your credit cards, prepaid cards, or U.S. dollars for purchases.
If you do decide to exchange currency at the airport, try to find the most reputable bank or currency exchange location. Avoid exchanging large amounts of cash, and use a no-fee credit card whenever possible.
