Getting the Best Value for Foreign Currency Exchange

August 05, 2014

As I walked through the airport a few weeks ago, the Travelex Currency Exchange booth caught my eye and gave me a great idea.  For a bon voyage for my stepson’s upcoming trip to Austria, I decided to get him some euros for pocket money so I checked out the rates. At the airport, 1 USD=0.6610 EUR but I wondered whether there might be an extra cost for the convenience of travelers getting euros at the airport. 

I put my idea on hold until I was able to contact my local bank to compare rates. Wells Fargo was offering an exchange of 1 USD for .70 EUR and they had them in stock at a branch just 15 minutes from my house!  That meant my $100 gift would equal 70 euros instead of just 66.10 euros, so that’s probably an extra Punschkrapfen rum-soaked pastry or cup of Mokka at an Austrian coffeehouse for Jason to enjoy.

Many of the banks and foreign exchange services also offer home delivery but there is typically additional shipping and handling costs for the convenience of having money on your doorstep, which lowers the value you get even more.  Another option I could have considered was to have sent money overseas so Jason could have received it once he arrived.  A fairly new service, TransferWise, offers peer-to-peer currency exchange with the promise of lower fees than traditional banks.  But with my small amount, the conversion was only going to be 1 USD for .6266 EUR, the lowest of the 3 conversion rates I compared.

In any case, if you are planning a trip overseas, it is a good idea to have at least some foreign currency with you before you leave the U.S. to cover immediate expenses such as taxis, meals, or tips. You can also avoid the hassle of exchanging currency upon arrival in case the airport and train stations don’t have exchange offices or if they are closed when you arrive. Otherwise you may be surprised by how expensive money can be.