Advice converting/sending US Dollars to Euros for an Italian villa rental?
 

I am organizing a trip to Italy for five couples and we are renting a villa. The villa requires 50% deposit upon booking and 50% prior to arrival. The rental company will convert to US Dollars but rate isn't ideal and I'm curious what others have done in these situations.

My two primary questions are as follows: 1) best way to convert and send the deposit and 2) thoughts on how to hedge / save the Euros for the balance due. Question 2 relates to if you wanted to lock in Euros at today's rate is there any easy way to save them without stuffing 2,000 Euros in your mattress at home for six months before the final payment is due.

Likely not huge impact due to swings in currency but just want to understand the logisitics so I can relay to our group. Thanks

Why are you letting the rental company "convert to US dollars?" Send them the deposit in euros. The cheapest way is to get an international draft in euros from your bank, which should cost you about $7. It's the equivalent of a cashier's check in another currency. The rental company may be charged a small fee to deposit it, but you can make that up later. Don't "convert" anything!

There's no logical way I can think of to lock in an exchange rate for anything. If you want today's rate, get your euros now. Get a second international draft for the balance, and mail it when it's due.

You could also use PayPal or an international ACH deposit, but the latter will cost you a fair bit.

And a last thought is...open up an account just for this transaction. Get a debit card for the account. Mail the debit card to the rental company (make sure you fund the account appropriately to cover any changes in the exchange rate), and let them withdraw the money.

Do NOT let them set the exchange rate! You can easily go online and find out what the current rate is.

Have you checked to see if the rental company will accept a credit card? It would be great if you could get points or frequent flyer miles as a bonus.

You can send the funds through a transfer service (like XE.com or Amex) to the rental company, but first you'll have to set up an account. Once you've set up the account, you can lock in a trade if you think the Euros will go up before you have to make the final payment.

The exchange rate is the market rate at the time you make the trade. The fee we pay is 1.5%. If the funds are coming from a bank account, you'll have to pay the bank's wire transfer fee.

An international draft may only cost $7, but the exchange rate offered by the bank can cost you as much as 12%.

The bank card idea works well. But do not tell the bank this is what it's for (ie a 2 time use) and be sure to alert them there will be a withdrawal in Italy when the time comes or it may be blocked.

I used PayPal to pay for my Paris apartment rental. It charges back to my credit card where I accumulate airline points.

Thanks for the advice all (and appreciate the passion). While it's not life changing dollars, still feel like a chump if you get taken for a ride on the FX issue.

StCirq - definitely not going to have them convert as I'm sure they would pad it nicely (just like you never exchange FX at an airport).

Both companies (we're down to two finalists) unfortunately won't do a credit card as agree that gives you the best rate and frankly the most protection if something happens (both companies appear well established but still don't love just mailing cash to some company).

Will look into the AMEX/XE idea as that seems like it may work well. Thanks again.