Airport Currency Exchanges: Cash Or Card?

Currency exchange kiosks at airports are convenient, but they also tend to offer poor exchange rates and high fees. It's better to exchange currency at a local bank branch or credit union, which usually offer better rates and lower fees. Some banks may even buy back leftover foreign currency in exchange for dollars when you return. It's also worth noting that using a credit or debit card is a popular method of overseas spending, as banks use the current exchange rate and many waive foreign currency and transaction fees.

Currency exchange rates

It's worth noting that not all currency exchanges charge the same rate. Airports tend to offer unfavourable rates and higher fees, as they cater to travellers who need cash immediately upon arrival. Exchanging currency at your bank or credit union before travelling is often a cheaper option, as is withdrawing money from an ATM once you arrive at your destination. Using a credit or debit card can also be a good option, as banks typically use the current exchange rate, and many waive foreign currency and transaction fees. However, it's important to be mindful of foreign transaction fees, which can add up quickly.

When exchanging currency, it's also important to consider the amount you need. If you only need a small amount, the exchange rate may not be as important. However, if you're exchanging a larger amount, even a small difference in the exchange rate can result in significant losses. Additionally, some banks may charge a convenience fee for exchanging currency, so it's always a good idea to compare rates and fees before choosing an exchange service.

Banks vs airport kiosks

When it comes to exchanging currency, there are a few options available to travellers. While many people think they can only exchange currency at banks, airport kiosks are another popular option. However, it's important to understand the pros and cons of each choice to make the most of your money.

Banks

Exchanging currency at a bank is often the first option that comes to mind. While some banks do offer this service, it's not available everywhere. It's always a good idea to call your local bank ahead of time to ensure they have a forex department and enough foreign currency on hand. Banks may also charge various fees, including exchange fees and transaction fees, which can add up, especially when converting larger sums of money. However, banks often provide better exchange rates than airport kiosks, and some banks may offer foreign ATM fee refunds, making them a more cost-effective choice.

Airport Kiosks

Exchanging currency at an airport kiosk is convenient, especially for travellers who are pressed for time before their trip. Airport exchanges always have foreign currency available, saving you time and providing peace of mind. However, the main drawback is that they often offer unfavourable exchange rates and may charge higher fees to make a profit. They tend to take advantage of travellers' need for local currency by offering worse exchange rates than other options.

While airport kiosks provide the convenience of last-minute currency exchange, banks generally offer better exchange rates and lower fees. To make the most of your money, it's advisable to plan ahead and exchange currency at a bank or local ATM, avoiding the costly markups associated with airport kiosks.

Using cards abroad

Notify Your Bank

Before travelling abroad, it is important to inform your bank about your travel plans. This helps the bank understand that you are overseas and that your card has not been cloned, copied, or stolen.

Understand Exchange Rates and Fees

When you use your card overseas, the transaction will be subject to an exchange rate, which is the rate at which your local currency is converted into the foreign currency. Exchange rates fluctuate, so it is important to check the current rates before travelling. Additionally, some banks and credit card companies may charge a foreign transaction fee, which is typically a percentage of the transaction amount. This fee is usually separate from the exchange rate and may be charged by your bank or the credit card company.

Choose Cards with No Foreign Transaction Fees

Some banks and credit card companies offer cards with no foreign transaction fees. These cards can help you save money when travelling abroad, as you won't be charged extra for each transaction. Examples of such cards include the Barclaycard Rewards Visa, Halifax Clarity Mastercard, and Chase debit card.

Pay in Local Currency

When using your card abroad, always choose to pay in the local currency. If you select to pay in your home currency, the retailer or ATM provider may use a less favourable exchange rate, resulting in higher fees. By paying in the local currency, you allow your card issuer to do the conversion, which typically offers a better rate.

Compare Exchange Rates and Fees

Before travelling, compare the exchange rates and fees offered by different banks and credit card companies. This will help you identify which cards offer the best value when making purchases or withdrawing cash abroad. Consider factors such as the exchange rate, foreign transaction fees, ATM fees, and interest charges.

Use Credit Cards for Purchases and Debit Cards for Cash Withdrawals

Credit cards typically offer better exchange rates and lower fees for purchases than debit cards. On the other hand, debit cards may be a more cost-effective option for cash withdrawals, as credit cards often charge higher fees and interest on cash advances.

Consider a Prepaid Travel Card

Prepaid travel cards allow you to load money in the foreign currency before your trip, locking in the exchange rate. This can help you avoid unexpected fluctuations in exchange rates and provide more control over your spending. However, be aware of any fees associated with loading funds onto the card.

Monitor Your Account Activity

While travelling, regularly check your account activity to ensure there are no unauthorised transactions. This will help you identify any potential fraud or errors and allow you to take immediate action if needed.

By following these tips, you can make the most of your cards while travelling abroad, maximising convenience, security, and cost-effectiveness.

Withdrawing from ATMs

• Check with your bank to see if they offer foreign ATM fee refunds or have reciprocity agreements with local banks at your destination, which can waive certain fees.
• Be aware of various fees charged by your bank and the ATM. These may include international or transaction ATM fees, which are often a flat rate or a percentage of your total withdrawal.
• Avoid dynamic currency conversion (DCC) offered by some ATMs, as this may include significant hidden fees. Instead, choose to pay in the local currency to get your bank's rate.
• Use ATMs from reputable banks to reduce the risk of excessive surcharges. ATMs at major banks or post offices are generally a safer bet.
• Withdraw larger amounts of cash at once to reduce the frequency of ATM fees. Plan your budget in advance to avoid having excess cash at the end of your trip.
• Pick a bank that is part of a global ATM network, which can help you locate convenient and low-cost ATMs at your destination.
• Consider getting a debit card with no foreign transaction fees or a non-bank alternative, such as the Wise account, to further reduce costs.
• Compare exchange rates before your trip to get an idea of what a fair rate looks like. This will help you identify whether an ATM is providing a reasonable rate.
• If possible, use your institution's app to find in-network ATMs near you, as out-of-network ATMs may incur additional charges.

Currency exchange fees

Banks

Banks are a common place to exchange currency, but they may charge what is known as a "convenience fee" for this service. These fees can vary depending on the bank and the amount of currency being exchanged. Some banks may also have higher exchange rates, which can result in you getting less foreign currency for your money. It is worth noting that some banks may refuse to exchange currency if you are not an account holder with them. In such cases, they may prefer to make the transaction via card so that they can charge a convenience fee.

Airports

Airport currency exchanges are known for offering unfavourable exchange rates and charging high fees. These exchanges often take advantage of travellers' last-minute transactions, knowing that they may need local currency as soon as they land. The exchange rates can be significantly higher than those offered by banks, and there is usually no point in comparing the different kiosks as they tend to offer similar rates. Additionally, airport kiosks may charge hidden fees within their exchange rates, making it difficult to know exactly how much you are being charged.

ATMs

Using an ATM to withdraw money in a foreign country can be a convenient option, but it is important to be aware of the associated fees. Foreign ATMs may charge fees ranging from $2 to $5 per transaction, in addition to any fees charged by your bank. It is also worth noting that international ATMs may have lower withdrawal limits than your bank allows, so it is important to plan ahead to ensure you have enough cash during your trip.

Credit/Debit Cards

Using a credit or debit card for purchases in a foreign country can be a convenient option, but it is important to be aware of foreign transaction fees. These fees can range from 1% to 5% of the purchase price, adding up to a significant amount over time. Some cards may also have higher exchange rates, resulting in a less favourable conversion for your money. However, there are cards available that do not charge foreign transaction fees, so it is worth shopping around to find the best option for you.

Frequently asked questions