Euros and Pounds

May 22nd, 2004, 09:35 AM
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Euros and Pounds

What are the pros and cons of changing US$ to GBpounds and Euros before leaving the States?

There would be a definite advantage to having the local currency as soon as one arrived. So what are the disadvantages?

I realize that the more cash I carry, the more vulnerable I am to theft, but I like to carry some cash (and some travelers' checks) for situations where the ATMs aren't working (and/ or swallow my card!).

I realize that in an ideal situation with an ATM I would get a better exchange rate than with a bureau de change here or abroad, but I will not have an ideal situation--my bank (Suntrust) charges $2 for each withdrawal from an ATM that isn't their own. I have not yet been able to determine if they also charge an additional fee (beyond the standard 1% imposed by Visa) for foreign transactions. (My credit card, issued by another bank, does not, so I will use it for most purchases.)

Can anyone think of anything I haven't taken into account?

Also, what would be about right for cash for two people for five days in GB, and another five days in Europe if we'd be charging all big purchases, including meals? (I'm thinking we'll need cash for tips, taxis, postage stamps, an occasional soda or coffee or candy bar . . . what else?)

May 22nd, 2004, 09:56 AM
Join Date: Jan 2003
Posts: 6,585
The only disadvantage to getting foreign currency before you go is that the exchange rate is worse. I would not bother at all with traveler's checks. ATMs are everywhere. If you get to the airport and the first ATM you see is down, or has a very long line, there will be another one if you just look around. Recently in Paris (CDG) the first ATM I tried wouldn't work for me (it was working for other people). So five minutes later I tried another one and it was fine. I've never had one "eat" my card, but as backup I carry two ATMs (two different banks - I opened an account at one local bank even though I rarely go there, because they only charage $1 for each foreign ATM use whereas my primary bank charges $5. So now when I'm going abroad I just deposit a few hundred in that account. This way if one bank's system is down, or your card gets eaten, you have backup).

I always charge whatever I can, but usually use a few hundred euro a week in cash for the times you can't use your credit card.

I always come home with between 50 and 100 euro. That way I don't have to worry about getting it before I go on the next trip. Plus it's a nice "psychological insurance" that I will be going back.
isabel is offline  
May 22nd, 2004, 10:03 AM
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A three percent nick on the conversion rate and a $2 flat charge for ATM withdrawals could easily seem like a steal compared to the unfavorable spreads and possible commissions you will encounter by making an exchange at the wrong place. My advice would be that you not attempt to secure all the cash you may need at once. Likewise, it doesn't pay to get such small amounts that you constantly need to go back and make transactions.

Nobody can really tell you how much cash you need because that is an individual thing, but I would probably want 300 GBP for various incidentals to start out with and perhaps 500 Euros. A couple of extra $2 charges isn't worth working into your planning. There are places where you are going to be better off using cash, including some places that you may choose to eat, small shops, etc.

Travelers checks can often involve extra charges and hassles, so I never recommend them to anyone anymore.
Flyboy is offline  
May 22nd, 2004, 10:09 AM
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Looks like Isabel was posting while I was typing. I do the same thing she does, which is to retain some "seed money" for the next trip. It's a promise to yourself to return and it's handy. (It's always a very helpful thing to loan it to good friends for their trips, with the understanding that they will replace it for you upon their return.)
Flyboy is offline  
May 22nd, 2004, 10:59 AM
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How much worse is the exchange rate if one exchanges the money in the States instead of GB or Europe?

Since I am not going to get a new bank account just for one 12 day trip, I have to figure on the $2 ATM fee that my bank charges plus any extra charges (the bank isn't very forthcoming about them) for the exchange.

So I am figuring that because of the additional bank charges, I would lose any advantage of changing the money in Europe and/or England. Am I wrong?

I'm thinking I would get 1/2 the cash I anticipate needing before leaving the US and then keep it down to one ATM transaction every 3 or 4 days if possible.

I must say that I envy people who never have trouble with ATMs. Maybe I am accursed or something, but I have had ATMs eat my card and give me the wrong amount of money (my husband was once given an EXTRA $20, but when it happened to me, I got less than I was supposed to). I've also had problems with endless lines at an ATM, getting lost while looking for the ATM that was supposed to be just around the corner, or having the ATM run out of money when I most needed it. Have I mentioned that I don't like ATMs?

Traveler's checks are certainly not the way to go for regular expenses, but I will be taking some as back up. They don't cost me anything if I don't cash them abroad.

Anyway, I appreciate the feedback. I am not going to agonize over a few dollars lost here or there. I'm just trying to get a general idea of what/how to plan my finances.
May 22nd, 2004, 11:54 AM
Join Date: Jan 2003
Posts: 2,154
The exchange rates you experience will vary by venue. You unikely to lose any advantage because the charges your bank makes on your card. The cost sounds like it's going to be 3%, plus $2 per transaction. You could easily lose 7% or more by trading currency in the U.S., plus a possible transaction charge.
Flyboy is offline  
May 22nd, 2004, 11:59 AM
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My kingdom for an edit function! You are very unlikely to lose more by using your card than by trying to exchange currency in the U.S.
Flyboy is offline  
May 22nd, 2004, 01:01 PM
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Thanks Flyboy (and others)!

Now if only I could just remember where the leftover GBP's from my last trip (20+ years ago) went!
May 22nd, 2004, 01:06 PM
Join Date: Jan 2003
Posts: 74,143
Hi reader,

>So I am figuring that because of the additional bank charges, I would lose any advantage of changing the money in Europe and/or England. Am I wrong?<

Yes, you are wrong. You will pay about 8-12% above the bank rate for a currency exchange.

If you withdraw 300E at a time, you will get a good rate and will not have too much money on you.
ira is offline  
May 22nd, 2004, 01:15 PM
Join Date: Apr 2004
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My last 4 trips I have not even had any foreign currency on me at all upon arrival; ATM's are all over the airports & the $2-$3 fee is worth it to get a favourable exchange rate. If you are going for 10 days and even if you use your ATM everyday, it would only be $20, certainly worth it compared to the poor rate you'll get buying it beforehand.
tully is offline  
May 22nd, 2004, 01:47 PM
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I need to look into this further because the amount I was quoted for exchanging money here was a little less than 5%. That may have been without transaction fees and/or for much larger amounts of money than I am planning to exchange.

In any case, I really appreciate the responses.


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