Ruth Haines
Getting foreign currency at the airport is convenient, but it can be costly. Airport currency exchange services often offer poor exchange rates and charge high fees. Ordering foreign currency from a bank before travelling is usually more cost-effective and can be done in person, by phone, or online. Banks typically offer competitive rates and low fees, but processing times and shipping costs may apply. Using a borderless account or credit cards can also help travellers avoid high currency exchange fees. While exchanging currency at the airport is an option, it is generally more expensive than other methods.
| Characteristics | Values |
|---|---|
| Convenience | Currency exchange at the airport is convenient, especially if you need immediate cash for expenses such as taxis and tips. |
| Exchange rates | Airport currency exchange services typically offer unfavourable exchange rates and high fees. Banks usually offer better rates and lower fees. |
| Peace of mind | Exchanging currency at the airport can save travellers the hassle of finding ATMs or foreign banks in a new place. |
| Risk of unused currency | Exchanging currency at the airport may result in travellers losing money if they don't use all of it, as there may be restrictions on returning or exchanging unused currency. |
| Reliance on cash | Some travellers prefer not to carry large amounts of cash due to security concerns or the challenge of keeping track of expenses. |
| Budgeting | It can be challenging to keep track of cash expenses, especially while travelling. Travellers may be tempted to spend more to use up extra foreign cash. |
| Alternatives | Ordering currency from your bank before travelling is often a more cost-effective option. Major banks may have branches abroad or partner with other banks, allowing access to ATMs with decent exchange rates and no out-of-network fees. |
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What You'll Learn
Ordering currency before travelling
When you order currency directly from your bank, you can usually get lower conversion fees than other options. Even with processing fees, ordering currency from your bank before departure usually saves money compared to exchanging cash at the airport. Airport currency exchange kiosks serve a captive market, so there is no real competition, and you could pay up to 15% more than bank rates, plus face additional hidden fees.
If you absolutely must exchange money at the airport, use a reputable company like Travelex, which is known for fair exchange rates and low markups. There are benefits and drawbacks to ordering foreign currency ahead of a trip, and it largely depends on your spending habits and goals while travelling. For example, you will have cash on hand for immediate expenses, such as taxis and tips, and you can skip the potentially long airport lines when exchanging currency upon arrival. However, there is a risk of losing money if you don't use all of the foreign currency, as there may be restrictions on returning or exchanging unused currency at a reasonable rate.
There are other options for obtaining foreign currency besides ordering from your bank or exchanging it at the airport. For example, you can use a foreign exchange service, but be sure to check the fees and charges, including any exchange rate markup. You can also open a borderless account from Wise, which allows you to hold your money in dozens of different currencies and use your linked debit card to make purchases and withdraw local cash from ATMs. There are no fees for opening or maintaining an account, and you will get the mid-market rate on all your currency conversions.
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Currency exchange at the airport
When exchanging currency at the airport, you may encounter high currency conversion fees and hidden costs, resulting in a significant reduction in the amount of money you receive. It is recommended to compare exchange rates and fees with other options before choosing an airport currency exchange service. Reputable companies like Travelex are known for offering fair rates and low markups at airports.
Ordering foreign currency from your bank before travelling is often a more cost-effective option. Banks typically provide competitive exchange rates and lower fees, allowing you to maximise the amount of foreign currency you receive. Additionally, some banks offer the convenience of ordering currency online or by phone, with the option of home delivery or pickup at a local branch.
If you are travelling frequently or for an extended period, consider opening a borderless account with a company like Wise. This type of account allows you to hold multiple currencies and make purchases or withdrawals without incurring additional fees. By topping up your account from your bank account, you can simplify your spending while travelling and avoid the high costs associated with airport currency exchange services.
While exchanging currency at the airport may be necessary in some situations, it is generally advisable to explore other options first. By comparing rates, considering alternative services, and planning ahead, you can ensure that you get the most out of your money when travelling abroad.
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Using cards instead of cash
While exchanging currency at the airport is convenient, it is not a good idea due to the high fees and poor exchange rates. Here are some reasons why using cards instead of cash when travelling is a better option:
Better Exchange Rates
Ordering foreign currency from your bank before you travel or using a reputable company like Travelex can help you secure better exchange rates and reduce stress upon arrival. Banks typically offer the most competitive rates and lowest fees. By ordering currency in advance, you can also compare rates and choose the most affordable option.
Avoid Hidden Fees
Airport currency exchange kiosks often charge premium pricing, with fees up to 15% higher than bank rates, plus additional hidden fees. Using your bank or a trusted currency exchange service can help you avoid these unexpected costs.
Convenience and Accessibility
While airport currency exchange counters are easily accessible, using a card means you don't have to worry about carrying large amounts of cash or exchanging money at all. Cards are widely accepted and can be used for most purchases, eliminating the need to constantly search for ATMs or exchange booths.
Security and Peace of Mind
Carrying large amounts of cash can be risky due to the possibility of loss or theft. Cards provide a more secure way to access your funds, and some even offer rewards or cashback. Additionally, with cards, you don't have to worry about returning or exchanging unused currency, which can result in restrictions and unfavourable rates.
Easier Budgeting
Using cards can make it easier to track your spending and stick to a budget. With cash, it can be challenging to keep track of how much you've spent, especially when converting between currencies. Cards provide a digital record of your transactions, making it simpler to manage your finances while travelling.
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Foreign exchange services
If you need foreign currency, it is recommended to order it from your bank before you travel. Banks typically offer the most competitive rates and lowest fees. Most banks allow customers to order foreign currency in person, by phone, or online, although you will need an account with the bank. Processing usually takes three days or less, and many banks offer home delivery for a small fee.
If you have a Bank of America checking account, you can order foreign currency online for collection or delivery. Alternatively, you can use a reputable company like Travelex, which is known for fair exchange rates and low markups. You can order currency from Travelex online and have it delivered to you, or you can collect it from one of their locations.
If you frequently travel or are going on a long trip, you could consider opening a borderless account from Wise. This allows you to hold money in dozens of different currencies and use a linked debit card to make purchases and withdraw local cash from ATMs. There are no fees for opening or maintaining an account, and you will get the mid-market rate on all currency conversions.
If you are unable to order foreign currency before your trip, there are other ways to curtail currency fees. Many major banks have branches abroad or partner with other banks, so using their ATMs can provide a decent exchange rate and eliminate out-of-network ATM fees.
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Currency conversion fees
Order Currency from Your Bank
Ordering foreign currency from your bank before travelling is usually more cost-effective than using airport exchange services. Banks typically offer competitive rates and lower fees. You can often order currency through your bank's website, mobile app, or by phone, and some banks may offer loyalty benefits such as free shipping or waived service fees.
Compare Exchange Rates
Before exchanging currency, it's essential to compare the current exchange rates offered by your bank and your destination airport to ensure you get a fair deal. Websites like Reuters or the International Monetary Fund provide trusted information on exchange rates.
Use ATM Networks
Banks often partner with other financial institutions to create international ATM networks. Using these ATMs while abroad can provide decent exchange rates and help you avoid out-of-network ATM fees, which can be substantial. Withdrawing larger amounts less frequently can help minimise these fees.
Prepaid Currency Cards
Consider using prepaid currency cards, which often have lower foreign transaction fees than credit cards. These cards allow you to load money onto them, helping you control your spending and avoid carrying large amounts of cash.
Dynamic Currency Conversion
When using your credit or debit card abroad, be cautious about dynamic currency conversion (DCC). DCC offers to charge you in your home currency instead of the local currency, but the exchange rate is typically unfavourable. It's usually more cost-effective to pay in the local currency and let your bank handle the conversion.
By following these tips, you can minimise currency conversion fees and make the most of your money during your travels.
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Frequently asked questions
No, airport currency exchange services are often the most expensive way to obtain foreign currency. They can charge up to 15% more than bank rates, plus additional hidden fees.
You can order foreign currency from your bank before you travel. Banks typically offer the most competitive rates and lowest fees. You can also use a foreign exchange service such as Travelex, which is known for fair exchange rates and low markups.
If you're returning to the US, it's not worth exchanging small amounts of foreign currency as forex is very expensive and hard to find. You could consider spending the money at the airport, donating it, or keeping it as a souvenir. If you frequently travel, you could open a borderless account that allows you to hold money in multiple currencies and make purchases or withdrawals when you travel.
