Lois Larson
Airports are designed to cater to the needs of holidaymakers and international travellers, including providing them with somewhere to exchange their currency before their travels. Currency exchange kiosks and counters are conveniently located within terminals, making it easy to access them just before departure, or immediately after landing. However, while exchanging money at the airport is convenient, it comes at a cost. Airport currency exchange counters generally offer the worst exchange rates. It's not uncommon to see airport exchanges charging 14% more than the current International Monetary Fund (IMF) exchange rate.
| Characteristics | Values |
|---|---|
| Convenience | Currency exchange kiosks and counters are conveniently located within terminals, making it easy to access them just before departure, or immediately after landing. |
| Cost | Airport currency exchange rates are among the worst you'll find. It's not uncommon to see airport exchanges charging 14% more than the current International Monetary Fund (IMF) exchange rate. |
| Alternatives | Ordering currency from your bank before you travel is almost always better than using the airport currency exchange. |
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What You'll Learn
Currency exchange at airports is convenient but costly
To get a better deal, it's recommended to order foreign currency from your bank before you travel. Major banks usually allow you to order currency online, through their website or mobile app, or by phone. While you should always check your bank's exchange rate before initiating the transaction, you can generally expect a more competitive rate than at the airport. Using a trusted source, such as Reuters or the IMF, to find current exchange rates can help ensure you get a fair deal.
For example, in January 2024, Bank of America's exchange rates averaged roughly 6% more than the IMF rates, while airport currency exchanges were charging more than double that amount. By ordering currency in advance from your bank, you can avoid the high costs associated with airport currency exchanges and make the most of your money while travelling.
In summary, while airport currency exchange services offer the convenience of last-minute or easily accessible currency conversion, they come with a significant price markup. To save money, it's advisable to plan ahead and obtain foreign currency through your bank or other trusted sources before departing for your trip.
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Ordering currency from your bank is a better option
Ordering foreign currency from your bank before travelling is a more convenient option than exchanging money at the airport. While airport currency exchange counters guarantee foreign currency, they usually offer the worst exchange rates. For instance, at Bank of America, the exchange rates in January 2024 were roughly 6% more than the IMF rates and less than half of what the airport currency exchanges were charging.
Most major banks allow customers to order foreign currency online, by phone, or through their mobile app. The process is simple: you enter the currency you need, add the desired amount, select the pickup method, and place your order. Some banks even offer to ship the currencies to you, and they don't charge extra for postage if you order a certain amount.
Ordering currency from your bank also ensures that you receive authentic notes and the best, legal rate. Exchange rates are constantly changing, and banks use various factors to determine their rates, including market conditions and rates charged by other financial institutions. By ordering from your bank, you can be sure that you're getting a fair deal.
Additionally, using the ATMs of major banks' international branches or partner banks is a good way to get decent exchange rates and avoid out-of-network ATM fees. It is recommended to withdraw larger amounts to limit the number of transactions and the associated fees.
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Airport currency exchange rates are poor
Airport currency exchange rates are often poor and should be avoided if possible. Airports know that they are one of the last stops for travellers needing local currency, so they charge higher exchange rates and additional fees. Currency exchange kiosks at the airport serve a captive market, so there is little to no competition, and they can get away with offering poor exchange rates. It is not uncommon for airport exchanges to charge up to 17% more than the current International Monetary Fund (IMF) exchange rate.
There are several reasons why airport currency exchange rates are so poor. Firstly, they take advantage of travellers' need for local currency upon arrival in a new country. Secondly, they capitalise on the convenience of exchanging money at the airport, especially for those who have run out of time or forgotten to do so before their trip. Thirdly, they exploit the limited options available to travellers at the airport, who may feel pressured to exchange money before leaving the airport.
To avoid poor airport exchange rates, it is recommended to plan ahead and explore other options. Ordering currency from your bank before you travel is almost always a better option. Major banks typically have a number of overseas ATMs available, making them an easily accessible choice for travellers. Additionally, many U.S. banks offer foreign ATM fee refunds and do not charge fees for using a foreign ATM.
If you are unable to obtain foreign currency in advance, there are still alternatives to airport currency exchanges. Once you leave the airport, you may find better rates at dedicated currency exchanges, local banks, or ATMs. However, be cautious of foreign transaction fees when using your card overseas, as well as dynamic currency conversion (DCC) offered by some ATMs, as these can also result in poor exchange rates.
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Currency exchange kiosks are easily accessible
These kiosks are conveniently located within airport terminals, making them easy to access just before departure or immediately after landing. This accessibility is especially useful if you haven't had the time or opportunity to exchange currency in advance. However, it's important to note that airport currency exchange counters generally offer unfavourable exchange rates, often much higher than the current International Monetary Fund (IMF) exchange rate.
Despite the convenience, it is recommended to order foreign currency from your bank before travelling, as this typically provides a better exchange rate. Most major banks allow you to order currency online, through their website or mobile app, or by phone. By checking the exchange rate in advance, you can ensure you get a fair deal.
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Alternatives to airport currency exchange
Currency exchange stores and kiosks at the airport are known to offer poor exchange rates and high fees, making them an unviable option for travellers. The exchange rates at the airport are usually marked up to make a profit, as travellers who have just gotten off a plane are likely to need money right away.
Local Banks:
Local banks or credit unions usually offer the best rates for currency exchange. They may also have overseas ATMs available for use, making them a convenient option for travellers.
ATMs:
Using a local ATM or a bank ATM to make currency exchanges can be a good option. Many foreign banks are happy to exchange your domestic currency for local currency at a better rate than you would find at an airport. Additionally, many U.S. banks offer foreign ATM fee refunds and do not charge fees for using a foreign ATM.
Credit and Debit Cards:
Using a credit or debit card can help you avoid many extra travel fees. It is a safer option than carrying cash, as they offer fraud protection and safety features such as the option to freeze them if misplaced.
Online Currency Convertors:
You can also order currency through an online currency converter, which will deliver the cash to your home. However, exchange rates may not be as favourable, and delivery charges may apply.
In-Airport Banks:
If you need to exchange currency at the airport, it is advisable to go to an in-airport bank or ATM instead of a currency exchange kiosk.
Order Currency in Advance:
Ordering currency from your bank before you travel is a good option, as you can avoid the long lines at the airport and potentially get a better exchange rate.
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Frequently asked questions
Yes, currency exchange kiosks and counters are conveniently located within airport terminals, making it easy to access them just before departure, or immediately after landing.
Exchanging currency at the airport is a convenient option for those who haven't had the time or opportunity to do so in advance.
Airport currency exchange counters generally offer unfavourable exchange rates and may charge additional fees.
Ordering foreign currency from your bank before travelling is often a better option. You can also use a money transfer app, expert brokers, or a travel money card to find better exchange rates.
