What is the best method for exchanging dollars for Euros?

  • I'm traveling from the US to Europe in a few weeks. When and what is the best method of exchanging dollars for Euros?

    I imagine there's options like:

    • at the airport when you arrive in Europe
    • at a bank in the US before you leave
    • at a bank in Europe upon arriving

    Whatever you do, don't do it at the airport. They always have the worst rates.

    ...unless you're in Singapore, where the best exchange rates are at the airport.

    Maybe it's best to go to your home bank to deposit the cash. For me, I can get selected foreign currencies at no cost from my own bank. This works for big international currencies and nearby currencies. So I would ask your bank.

    Yes, do it at the airport when you arrive—WITH AN ATM, not a scalping exchange booth!

  • I use five strategies to pay for things when I travel:

    1. The best rates are often the rates you get with your American credit card or debit card. Try to charge as much as you can. The fees are very low and the exchange rates are fair. However, many American banks charge several dollars for every foreign currency transaction, so if you plan to spend a lot of time in Europe, you may want to apply for a credit card with low or free foreign currency transactions. Right now, Capital One has a reputation for being the best deal on foreign currency.

    2. My second favorite strategy is to get cash out of foreign ATMs using my own bank's debit card attached to my checking account. I've never had a problem with this, but I have heard that if your PIN is more than 4 digits, it may not work internationally. There are a few countries where most ATMs don't like American bank cards, notoriously Japan. In Japan, if you can find a post office, they have ATMs that are happy to accept American bank cards.

    3. Any kind of transaction that involves a human being standing behind a counter changing money for you is going to be bloody expensive. Like, 15% expensive... or more. You have to pay for the person and the counter. I very rarely do this.

    4. Very rarely, in Europe, you will find yourself dealing with an automatic machine that ONLY accepts credit cards and which keeps asking you for a PIN or refusing to read your American credit card. The most common places I've had this happen:

      • Automatic ticket machines at railroad stations
      • Bicycle rental machines
      • Unattended gas stations
      • Toll booths in France

      Essentially what's happening here is that European credit cards have an embedded chip and require a PIN, while American credit cards use a magnetic stripe. In some situations in Europe you must pay with a Chip and PIN credit card. See this question for information about getting a chip and pin card as an American. There is some evidence that Chip and PIN cards will be widely available to US bankcard holders in Fall 2015.

    5. In a pinch, you'll discover that nicer hotels are often happy to convert money for you. The rates are not very good, but if you keep a few hundred dollars in US cash hidden away somewhere safe, it'll get you out of just about any kind of situation.

    There is a fairly standard 3% fee for foreign transactions on US credit cards (2% for AmEx and Discover, even less for some government credit unions and some Capital One cards). There is also a "Dynamic Currency Conversion" (DCC) fee that some credit cards charge *on top of* the 3% fee. The DCC can cost up to an additional 7%, so some cards can have up to a 10% fee. I think the DCC may be set by the vendor, not the purchaser's credit card, so it can vary by transaction. AmEx apparently does not allow DCC fees; they have a flat 2% fee.

    For #2 When i was in Japan, had to take the subway into downtown Yokohama(30mins) to the nearest ATM that had the ability to withdraw directly from my account(Citibank) in the US. It was worth the trip as I received my money without a surcharge, at the exact daily exchange rate.

    Capital One credit cards do not charge a foreign transaction fee. They are the only major credit card company that does not charge foreign transaction fees. Credit union debit cards and some smaller credit card companies charge 1% foreign transaction fees.

    Note that the CHIP+PIN thing is primarily for debit cards; if you have a credit card, the old sign-and-swipe thing will work (but is highly insecure). Keep an eye out on your statements.

    At this writing, AmEx has increased its foreign currency exchange fee to 2.75%, while Discover has lowered theirs to zero and are moreover accepted anywhere Diners Club is. Discover is now useful in Europe, which was not true before.

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Content dated before 7/24/2021 11:53 AM