Best exchange rate

July 10, 2007 4:31 AM

Exchanging euros to dollars for a vacation. What's the best way?

I'm going to the US for around a month over the summer (late august - september) and I was wondering what is the best way to exchange euros to dollars. I'm looking for the most advantageous exchange - should I buy cash, traveller's checks? Should I simply use credit cards? Should I exchange money now or will the dollar continue to drop over the next 6-7 weeks?

I'm not planning on spending a great deal of money - perhaps a few thousand euros.

posted by sic to work & money (18 comments total)

My understanding has always been that ATMs deliver the best exchange rates.
posted by thejoshu at 4:34 AM on July 10, 2007

Go to your bank and get some dollars - avoid doing so in an airport or major city; they will rip you off. Traveler's cheques are also good idea, but you will want a little cash.

Get travel insurance. It's essential. Yanks never do, but everyone knows they don't know how to travel ;-)

Get a money belt or something that you can use to keep from getting pickpocketed. Parts of the US are extremely crime ridden, especially if you have a foreign accent and look like a tourist. Don't get in a 'gypsy' cab in NYC.

Yeah, you should be able to use your CC - call your CC company warn them that you will be using it in the US or they will assume fraud.
posted by chuckdarwin at 4:37 AM on July 10, 2007

Just withdraw from ATMs. You'll get a fair exchange rate, and you won't be constantly worried about your stash of money (even traveller's checks are a minor PITA to replace that you don't want to have to worry about.)

The only disadvantage is that it's harder to budget. But keeping track of your transactions is still a lot better then having a big wodge of cash and worrying about the safety/location of said cash, and a hell of a lot easier than 1- getting traveller's checks, 2-signing traveller's checks, 3-using traveller's checks in an age where few people use them, 4-worrying about safety/location of traveller's checks and 5-cashing in remaining traveller's checks when you get home.

No contest.
posted by Mayor Curley at 4:43 AM on July 10, 2007

And it might be nice to have a little american currency when you land, but it's not necessary. Any American airport will have a set of ATMs on the airport concourse so you can have cash before you retrieve your luggage.
posted by Mayor Curley at 4:46 AM on July 10, 2007

Credit cards give you a good rate and may be the best option if you have a card that doesn't charge you a foreign currency fee, but most cards do. USAA is one company that doesn't. Capital One is actually the best for this, since they even rebate you the 1% that Mastercard and Visa charge.
posted by phoenixy at 4:48 AM on July 10, 2007

WARNING!

You will NOT get a 'fair' exchange rate from ATM withdrawal or CC purchase. The companies load the exchange rate so that they make money every time you use your cards. You may also be charged for ATM withdrawal as well.

However, the rate might be better than money changing or traveller's cheques.

Some banks (e.g. Nationwide in the UK) offer cards that don't have the loaded rates applied but you'd have to check with the banks in your country to see if any of them do this.

moneysavingexpert.com has further details on the UK situation. No idea on the situation in Spain or the Euro Zone.
posted by i_cola at 5:45 AM on July 10, 2007

Perhaps it doesn't work the same way (US to Euro), but having just returned from a lengthy stay, I can verify that ATM withdrawals did give me the best exchange rate (even with the transaction fee). The trick was minimizing the number of withdrawals since the fee was tied to the transaction rather than the dollar amount (in my case). Fees are assessed in every type of exchange, they're unavoidable. Traveler's checks are less ubiquitous these days. And, I wouldn't change your money weeks in advance; the rate will still be favorable when you arrive. The truth is probably that there are no hard and fast rules. I would check with your banks and game out your own situation.
posted by B-squared at 6:20 AM on July 10, 2007

ATMs will give you the best exchange rate, but they will also charge you so depending on the amount withdrawn any goodness seen in the exchange rate is eaten by fees. Take about a week's worth at a time and you'll be fine.

Check with your bank to see if they have agreements with US banks to waive the fees. For example, my Bank of America ATM card can be used for free at Barclays in the UK and Deutche Bank in Germany.

Many places in the US take credit cards even for very small amounts. You can go days without spending cash. Again check with your bank to see what the foreign conversion fee is on charges made. Some charge as much as 3%. however that is still better than the moneychangers at the airport. Also, some banks still want you to call them before you leave and let them know you'll be traveling so they won't suspend your card for supposed fraud. Fixing that is easy enough, but involves an expensive call back to your home bank and the hassle/embarrassment of having a purchase declined.
posted by birdherder at 6:36 AM on July 10, 2007

Credit cards and ATMs /can/ have a very, very good rate, but just as with all other things in the finantial industry, it depends on how eager and willing your issuer/bank is to screw you.

Check with your cards details.
posted by cmiller at 6:46 AM on July 10, 2007

You will NOT get a 'fair' exchange rate from ATM withdrawal or CC purchase. The companies load the exchange rate so that they make money every time you use your cards.

Yes, and? How is that unfair? Your use of a foreign ATM costs your card issuer and card network money. Some card issuers charge 1 percent for this, which I think is reasonable. Others charge more like 3 percent, which is ridiculous.
posted by grouse at 6:52 AM on July 10, 2007

Get your first day's dollars in cash before you go, and use ATMs once you're there, but take other people's advice and withdraw enough at one time (safety permitting) to ensure you don't take a big hit from transaction fees.

Even though airports have ATMs, you're better off not having to worry about getting cash once you've survived the passport/customs experience. Just have the dollars in your pocket already and head to ground transportation.

Lastly, ask for smaller denominations from your ForEx place: my experience is that they tend to want to give travellers $50 and $100 bills, which never really go down well in the US, unless you're in Vegas. Tens and twenties are your friends.
posted by holgate at 7:03 AM on July 10, 2007

You will NOT get a 'fair' exchange rate from ATM withdrawal or CC purchase.

You're not going to get a better one elsewhere. You'd be incredibly naïve to expect anyone to give you a mid-market rate. Ever.
posted by oaf at 7:12 AM on July 10, 2007

Although this is entirely useless for the OP, who is going to the US, not coming from the US, Capital One no longer eats the Visa/MC exchange fee. They stopped doing that 6 months to a year ago, IIRC.

They did have a decent exchange rate when I was in Canada, though. It was nice not being screwed by them for a change. ;)

Unless you have a bank account here in the US and can get a decent service to transfer Euros from your account over there to Dollars in your account over here at a good rate, using ATMs (or just using a Visa or Mastercard credit card for your purchases, if you have one that has a good exchange rate and low fees) is probably the best course of action.

There are ATMs everywhere, and many merchants can do ATM transactions, although that's a sure way to pay far too much in fees.

Unfortunately, most merchants here don't accept credit or ATM cards from foreign networks.

I'd just use credit cards and keep a small amount of cash on hand, unless you know you're going to be in a place where credit card acceptance is a problem. (not very many places, these days!)
posted by wierdo at 7:32 AM on July 10, 2007

Get a money belt or something that you can use to keep from getting pickpocketed. Parts of the US are extremely crime ridden, especially if you have a foreign accent and look like a tourist. Don't get in a 'gypsy' cab in NYC.

Oh, jesus. Nowhere you will be going as a tourist is going to get you pickpocked or mugged as long as you seem aware of yourself. Gyspy cabs may try to fleece you, but they aren't going to drive you to some vacant lot and kill you. Use your credit cards and the ATM.
posted by dame at 7:43 AM on July 10, 2007

Thanks for your advice everybody, I'm going to the bank today to see what they say about the atms and credit cards. I also may be able to transfer some money to a relative's account who is living where I am going.

Thanks again!
posted by sic at 3:39 AM on July 11, 2007

I also may be able to transfer some money to a relative's account who is living where I am going.

If someone has to change the currency over, it will probably still be more costly than using an ATM if your bank provides a good fee.
posted by grouse at 6:06 AM on July 11, 2007

Having a single ATM card as your funding source can be a little risky. If it gets eaten, or lost, or just stops working for no reason, you need to have an alternate plan. I might be a little paranoid, but when I travel, I carry (in order of use):

1) Two ATM cards from different banks. HSBC Savings is the backup one, since they will give you an ATM-only card for their high interest savings account, and tend to have a presence in unusual travel places.

2) $150-$200 in US cash in twenties.

3) $100-$200 in Amex Traveler's checks. Pain to use in most places nowadays (except the US actually), but safe.

4) Credit cards that I know the PIN for, to do an emergency cash advance.
posted by smackfu at 6:24 AM on July 13, 2007

All of this advice about using ATMs and credit cards because they give you a good rate is complete bollocks. I've worked in foreign currency for 4 years and know for a fact that relying on such methods to convert your money is a rip off. Not only do you get a bad exchange rate, you also get charged a curency conversion or a however-they-choose-to-label-it fee.

The most cost effective way to exchange money is typically to use a foreign exchange specialist and to use electronic banking at every step of the process - you always want to avoid dealing with cash.

All of this is explained in more detail at http://movingmoney.net
posted by dbateman at 1:36 AM on September 9, 2007