Airport Currency Exchange: Worth The Convenience?

When it comes to travelling abroad, exchanging currency at the airport is a widely debated topic. While it is a convenient option, with shorter lines and guaranteed availability of foreign currency, travellers often end up losing a significant amount of money due to unfavourable exchange rates and hidden fees. On the other hand, exchanging currency at local banks or credit unions before departing on an international trip is generally recommended as it can help minimise fees and ensure better exchange rates. Additionally, using international banking apps or currency cards are also suggested as efficient alternatives.

The airport exchange rate is not always the best

Exchanging currency at the airport is convenient, especially if you need cash immediately after landing in a foreign country. However, the airport exchange rate is not always the best, and there are more cost-effective ways to get foreign currency.

High Exchange Rates

Airport currency exchange shops and kiosks often offer unfavourable exchange rates. They tend to charge higher rates because they know travellers may need local currency immediately after arriving at the airport. These shops and kiosks take advantage of travellers' urgency and make substantial profits by offering poor exchange rates.

High Fees

In addition to poor exchange rates, airport currency exchange services may also charge higher fees. These fees are sometimes hidden within the unfavourable exchange rates. As a result, exchanging currency at the airport can be significantly more expensive than other options.

Better Alternatives

To get better exchange rates and avoid high fees, it is advisable to plan ahead and obtain foreign currency before arriving at the airport. Here are some recommended alternatives:

• Local Banks or Credit Unions: Exchanging currency at a local bank or credit union before leaving for your trip is often the best way to minimise fees. Many major banks offer foreign currency without charging additional fees beyond the exchange rate.
• ATMs: Using a foreign ATM to withdraw cash in the local currency can be a convenient and cost-effective option. ATMs tend to offer competitive exchange rates, and by withdrawing larger amounts, you can save on ATM fees.
• Credit Cards: Using a credit card that offers favourable exchange rates and does not charge foreign transaction fees can be a good alternative to carrying large amounts of cash. However, it is important to read the fine print and understand any associated fees.

In summary, while exchanging currency at the airport may be convenient, it is not always the best option in terms of cost. By planning ahead and exploring other alternatives, travellers can often obtain better exchange rates and avoid unnecessary fees.

Avoid currency exchange kiosks at airports

While exchanging currency at the airport is convenient, it is not the best option. Currency exchange kiosks at airports often offer poor exchange rates and charge higher fees.

Firstly, airport currency exchange kiosks are known to offer unfavourable exchange rates. They are aware that travellers may need local currency urgently upon arrival, and take advantage of this by offering lower rates. For example, if your bank offered an exchange rate of £72 per $100, an airport kiosk may only give you £67 per $100. This means you would receive fewer pounds for your dollars, resulting in a loss.

Secondly, airport kiosks may also charge higher fees, which are sometimes hidden within their poor exchange rates. These fees can add up, especially when converting larger sums of money.

Therefore, it is advisable to plan ahead and exchange currency before arriving at the airport. Getting foreign currency from a local bank or using an ATM to withdraw the local currency are often better options, offering more competitive rates and lower fees.

Additionally, using a credit or debit card for purchases while travelling can be a convenient alternative to carrying cash. However, be mindful of foreign transaction fees associated with card payments, which can add up to significant costs.

In summary, to get the best value for your money, it is recommended to avoid currency exchange kiosks at airports due to their uncompetitive exchange rates and higher fees. Planning ahead and utilising alternative options, such as local banks or ATMs, can help travellers get more favourable rates and save money during their trip.

Exchange currency at banks

Exchanging currency at a bank is a good option if you want to avoid the high fees associated with airport currency exchanges. Banks often provide better exchange rates than those found at airports, and their fees are typically lower. However, it's important to note that not all banks offer currency exchange services, and some may have limited amounts of certain types of currency available. Therefore, it's recommended to call your bank in advance to ensure they can accommodate your request.

When exchanging currency at a bank, you may be charged a transaction fee, which could be a flat fee or a percentage of the total amount exchanged. Some banks may also charge a shipping fee if you choose to have the currency delivered to your home. In addition, banks may require you to be a customer and present identification, such as a passport or driver's license, when exchanging currency.

Compared to airport exchanges, banks often require more time and planning. They may need to order the foreign currency you need, which can take several days. Therefore, it's advisable to allow ample time before your trip to visit your bank and exchange your currency.

Major banks, such as Bank of America and Wells Fargo, typically offer a wide range of currencies and can be a convenient option for exchanging money. They may also provide online or phone ordering options, allowing you to have the currency delivered to your home or pick it up at a branch. However, be sure to compare exchange rates and fees across different banks to ensure you're getting a good deal.

In summary, exchanging currency at a bank can offer better rates and lower fees than airport exchanges, but it requires more planning and may involve additional steps. By allowing enough time and comparing rates, you can make the most of your money when exchanging currency at a bank.

Reserve money at the airport

Exchanging currency at the airport is a convenient option for travellers who don't have time to visit their bank before their trip. It can be a good idea to reserve money at the airport if you want the added security of knowing that you'll have the local currency waiting for you when you arrive at your destination. This can be especially useful if you need to catch a connecting bus, train, or taxi upon arrival.

Things to consider when reserving money at the airport

When reserving money at the airport, it's important to keep in mind that airport currency exchange rates are typically less favourable than those offered by your bank. Airport exchanges often charge higher fees, which may be hidden within the poorer exchange rates. These fees can add up, especially if you're converting a large sum of money.

How to get the best exchange rate at the airport

If you plan to reserve money at the airport, it's a good idea to do some research in advance. Compare the exchange rates offered by different kiosks or vendors operating within the airport. Additionally, consider using a currency conversion calculator to determine how much money you should receive for your local currency. This will help you avoid getting charged extra fees in the form of unfavourable exchange rates.

Other options for exchanging currency

If you want to avoid the high fees and unfavourable exchange rates often associated with airport currency exchanges, there are several other options available. One option is to visit your bank or credit union before you leave and exchange your money there. Many major banks offer foreign currency exchange services and may have the currency you need in stock. Alternatively, you can order the currency online or by phone and have it delivered to your home. Using a credit card that offers favourable exchange rates and no foreign transaction fees is another option for accessing money when travelling abroad.

Exchange rates and fees

When exchanging currency, the exchange rate is the most important factor to consider. The exchange rate dictates how much foreign currency you will receive for each unit of your local currency. For example, if the exchange rate is $1 to R18, you will get R18 for every $1 exchanged. Thus, exchanging $100 will get you R1,800.

However, it is also important to consider the fees associated with currency exchange. Banks and vendors have unique exchange fees that will be deducted from your funds. For instance, if a bank charges a 3% exchange fee and you exchange $100, the bank will take $3 as a fee, leaving you with $97 to be converted according to the exchange rate.

Transaction fees are different from exchange fees. Some banks charge an additional fee for each transaction made in a foreign currency, which can be a percentage added to the exchange rate. These fees are typically small but can add up when exchanging large sums of money, ranging from 1% to 3% depending on the bank and the amount exchanged.

When it comes to exchanging currency, convenience is also an important factor. The days leading up to an international trip can be busy, and you may not have time to visit a bank to exchange your money. Airport currency exchanges offer a convenient option, with shorter lines and the ability to exchange money while you wait for your flight. Additionally, some airports allow you to reserve money in advance, guaranteeing that you will have the desired amount waiting for you when you arrive.

However, it is worth noting that airport currency exchanges typically offer less favourable exchange rates and may charge higher fees. These exchanges take advantage of travellers' need for local currency upon arrival, knowing that travellers may not have had time to exchange money beforehand. As a result, they offer poorer exchange rates and charge higher fees, resulting in lower amounts of foreign currency for travellers.

To get the best exchange rates and minimize fees, it is recommended to visit your bank or credit union before leaving your home country to exchange currency. Major banks often have foreign currency available without charging additional fees beyond the exchange rate. Ordering currency from your bank in advance can also ensure that you receive authentic currency and a competitive exchange rate.

Using credit or debit cards abroad can also be a convenient option, but it is important to be aware of foreign transaction fees, which can add up to significant costs. Reading the fine print on your bank's website or calling them directly can help you understand any applicable fees. Applying for a credit card that does not charge foreign transaction fees can be beneficial if you have enough time before your trip.

Frequently asked questions