$ to £ Currency Exchange For Basic Trip

November 5, 2008 2:23 PM

I'm taking a standard week-ish trip to the UK soon and I'm (obviously) going to need some cash for traveling. What's the best way to get US Dollars converted into British Pounds?

There are a few currency conversion options available to me:

- Generic currency exchange at Detroit Metro Airport (DTW). Convenient, but likely has fees and a poor rate.
- Travelex exchange at Gatwick. Probably has a better rate than at DTW, but likely won't be very good. Also, unknown fees (I can't find a schedule online).
- Grab cash from an ATM in the UK. Likely has a good exchange rate, but incurs a 3% fee from the bank (Fifth Third).

In the past I've just converted a few hundred dollars to pounds sterling at Travelex, but I'm not sure if this is the best plan. I had no British currency until I was actually in the airport, but the rate was decent and I was informed that I'd converted enough that buy-back would happen at the same rate, should I need it. Cash beyond this was just withdrawn from ATMs.

Does this sound like the best plan, or is there something else which you would suggest that I try?

I would use a credit card more often there, but all of my cards lack the chips which seem to be required these days. I've been told that many locations no longer have the ability to swipe magstripe cards.

posted by c0nsumer to travel & transportation (21 comments total)

Find a british tourist at the airport and do a swap
posted by chelegonian at 2:33 PM on November 5, 2008 [1 favorite has favorites]

The best plan is to get an ATM card from a bank that won't charge you 3%. But even 3% is probably far, far less than what Travelex or your American currency exchange will charge between their poor rates and commissions.

I just left the UK three months ago. The only place where my magstripe credit cards were declined were for tube and rail ticket sales. I think you were misinformed. But check the rate on your credit card as well.

You should be able to get both of your foreign exchange rate discounts down to 1% or less.
posted by grouse at 2:34 PM on November 5, 2008 [2 favorites has favorites]

Yeah, we simply hit up an ATM in the UK to withdraw the dosh (pardon the British affectation) we needed. Never used the currency exchange bandits at all.
posted by trinity8-director at 2:43 PM on November 5, 2008

I was there just last year and every place I went still took my Capital One card that didn't have the chip and pin system. In addition, Capital One doesn't charge any currency exchange fees, and even eats the Visa/MC fee too, so the net fee is just zero (at least with my card). I got the card specifically for the trip.

In any case, you can just try and then have the backup of ATM cash. If you open a Bank of America account, I think the extra 3% fee is waived at Barclays ATMs.

You should call to verify these things, though, this was 11 months ago! Good luck.
posted by melvinwang at 2:48 PM on November 5, 2008

Use any ATM, the rate is much better than the currency exchange booths in the airport in my experience.
posted by spatula at 2:52 PM on November 5, 2008

I'm really surprised that you incur a 3% fee from your bank for withdrawing cash from at an ATM. My bank charges a flat International ATM withdrawal feel ($3.50) and the rest is at a pretty good exchange rate (pretty close to the "official" rate for the day).
posted by polexa at 2:57 PM on November 5, 2008

Don't use any currency exchange in an airport unless you want to get reamed on fees!

ATMs are handy if you don't like carrying large amounts of cash, but what you really need to do is find a post office once you hit London. British post offices will change dollars to pounds and vice versa with no fees or comission.

(But be prepared to stand in line.)
posted by the latin mouse at 3:11 PM on November 5, 2008

If you have enough time, buy some cash from your in-person bank weeks in advance. That's probably their best rate.
posted by rokusan at 3:28 PM on November 5, 2008

British post offices will change dollars to pounds and vice versa with no fees or comission.

This is a deceptive claim. Today, the Post Office is selling dollars at USD1.5272/GBP. The interbank rate now according to oanda.com is USD1.58382/GBP. With the high 3% premium charged by your bank, that goes down to USD1.536/GBP, but it is still a better deal than the Post Office, who seem to be charging an approximately 4% premium.

In general, the surest sign that you are being screwed on the bid/ask spread is a claim of "no fees or commission."
posted by grouse at 3:37 PM on November 5, 2008

I did all ATM's while there in June.
posted by thilmony at 3:56 PM on November 5, 2008

Use your magstripe card for the 90% of cases in which you will be able to use it. British shops can certainly read magstripes; in fact, they'll use the magstripe to read a chipped card when the chip's playing up, which can happen sometimes. In my experience, they'll be somewhat more scrupulous about the signature on the back than US stores, though, so make sure that it's legible. (Fool that I am, I unwittingly carried around and used an unsigned US card for five months. It wasn't until I tried to use it in the UK that I was alerted to this.) For the tiny proportion of cases where you can't use the magstripe - essentially just machines like those which sell tube tickets, because they can't check the signature - or where you need cash, use an ATM. And if you're buying tube tickets, for heavens' sake get an Oyster card, even if it's only a week. That will save you more money than you ever could by fussing around with complex exchange options.

Or just go to a high class Bureau de Change.
posted by Acheman at 3:57 PM on November 5, 2008

I'm going to ditto what grouse said - get an ATM card that won't charge you the fee. I'd suggest ING Direct's Electric Orange account. Easy to set up, transfer money to and from your 5/3 account.

Just as a bit of anecdotal sideline - I went to a few countries in Western Europe (although not the UK) with my mom last year, and we both use 5/3 our primary banks back home. I did what I mentioned above and just moved a sum of money over to the ING account and used that debit card to make ATM withdrawals, and my mom just stuck with her 5/3 debit card. I never had any issues making ATM withdrawals, but twice (in different countries) she couldn't make withdrawals - we never could really determine if it was the bank itself or an incompatible atm network. FWIW
posted by dicaxpuella at 4:37 PM on November 5, 2008

I spent a month in London, Scotland, and Ireland in 2007 and had absolutely no problem using my American credit/debit cards for anything I wanted. No fee to exchange currency, and your credit card gives you a better exchange rate than you can get from anywhere else. If you do need some actual cash, it might be worth it to just use an ATM.

If you want a bunch of cash, consider travelers cheques. Yeah, AmEx charges a fee, but it's flat, so if you want to convert US$1000 the fee, with shipping, winds up being around 1%. Great exchange rate too. They can also be canceled and replaced if lost or stolen, which is nice, as certain parts of London are notorious for their pickpockets.
posted by valkyryn at 5:50 PM on November 5, 2008

Thanks for all the suggestions, everyone. Unfortunately I'm leaving a bit too soon to acquire a new ATM card, so I think I'll just suck up the 3% fee and deal with things in mostly-cash. I'll sort out the credit card transaction fees and see which of my cards (HSBC and BoA) are cheapest, and use those when I can for larger purchases.

I was able to get £20 cash tonight from a friend who just happened to have it in his wallet, so that'll get us through the initial stuff at the airport and maybe into the city on the tube. From there I'll just visit an ATM.
posted by c0nsumer at 7:57 PM on November 5, 2008

I spent a month in London, Scotland, and Ireland in 2007 and had absolutely no problem using my American credit/debit cards for anything I wanted.

I lived there for almost five years, and had no problem with my American credit cards. It was only beginning in May–June 2008 that I was no longer able to use my American card at Cambridge station.
posted by grouse at 9:36 PM on November 5, 2008

I spent a month in London, Scotland, and Ireland in 2007 and had absolutely no problem using my American credit/debit cards for anything I wanted.

I lived there for almost five years, and had no problem with my American credit cards. It was only beginning in May–June 2008 that I was no longer able to use my American card at Cambridge station.

This may have changed very recently. An American friend visiting me last week had all sorts of problems using her american credit card at every restaurant we went to. In one place (tea at Kensington gardens which should be used to tourists) they had to go summon a manager. In another (one block from the British museum) they flatly said that if the card had no chip, then she had to pay cash.
posted by vacapinta at 1:27 AM on November 6, 2008

HSBC have a big high street presence in the UK too, if that helps at all; it's not impossible that charges might be lower if you use a HSBC ATM. Worth checking out at least.
posted by tiny crocodile at 3:58 AM on November 6, 2008

As another update, I found today that all of my cards (HSBC and BoA CCs, and 5/3 ATM) have a 3% foreign transaction fee. So, based on this, it seems like cash vs. credit will cost the same, presuming I don't run into the aforementioned non-chip-card problems.
posted by c0nsumer at 8:04 AM on November 6, 2008

Does 5/3 charge you a flat fee (on top of the forex premium) for using a non-5/3 ATM? If so, then using credit will still be marginally cheaper.
posted by grouse at 8:30 AM on November 6, 2008

If you want to take dollars with you and then swap them into pounds when you get to the UK, check this site before you swap, which will give you an up to date comparison of the different rates that different companies will give you and where you'll get the best deal. Just put "US Dollars" in the "pick your currency" part.

And grouse is right, companies that advertise "no commission" are usually ripping you off on the spread. Beware.
posted by triggerfinger at 12:06 PM on November 6, 2008 [1 favorite has favorites]

And... it turns out that my girlfriend's credit union does a 1% foreign currency fee. I think we'll be using that.

Thanks again, everyone!
posted by c0nsumer at 3:07 PM on November 7, 2008