COVID-19 Travel Advisory: Stay up to date with the latest on the coronavirus pandemic.   Learn More >

Money Exchange

Old Aug 11th, 2008, 04:46 PM
  #1  
Original Poster
 
Join Date: Aug 2008
Posts: 2
Money Exchange

We recently returned from a trip to Costa Rica. I did a ton of research but skated past most of the money exchange information. Lesson learned. While in the Houston airport, I decided to exchange US dollars for colones, the Costa Rican currency, at TravelEx.

They gave me 470 colones to the dollar and waived the service fee if we exchanged $300 or more. At our first hotel in Costa Rica, the hotel gave us 540 colones for each dollar...no charge, no minimum exchange amount.

What's more? We never saw an exchange rate in Costa Rica under 500/1.

When we returned to the US, my husband asked (just for amusement) what the exchange rate was from colones to the dollar. It was 621!! So they cheat you on the way in to the country and cheat you on the way back into the US. As far as I'm concerned, TravelEx is a bunch of crooks. I vowed to come back and blog to warn others. I'm sure there are reasonable alternatives, and I suppose in hindsight, I should have considered that most airport businesses and services come with a hefty premium. Now, I really hope this helps some unassuming traveler down the road. Happy travels.
guti_girl is offline  
Old Aug 11th, 2008, 05:22 PM
  #2  
 
Join Date: Oct 2005
Posts: 66,872
"As far as I'm concerned, TravelEx is a bunch of crooks"

No, they aren't. You simply did not do your homework. Buying and selling back currency is not the way to get cash. It is usually best to use an ATM card to get cash while you are traveling. It is more expensive to buy currency from a different country - and you did it twice.

You bought Colones in the USA, so naturally they cost more. TravelEx has to make a profit on currency transactions.

An what you husband learned when asking about selling colones back for $ is there is ALWAYS a difference between the "buy" and the "sell" rates.

This is good info to know - how to get foreign currency. But TravelEx did not cheat you and they are not crooks.
janisj is online now  
Old Aug 11th, 2008, 05:25 PM
  #3  
 
Join Date: Oct 2005
Posts: 66,872
Oh - I goofed on the "twice" bit. I meant you did it once and then the 2nd time was when you asked about the sell rate back in the States.

janisj is online now  
Old Aug 12th, 2008, 04:12 AM
  #4  
ira
 
Join Date: Jan 2003
Posts: 74,631
Hi GG,

Just because you didn't bother to learn how to exchange foreign currency doesn't make someone else a crook.

Exchange bureaus are profit making organizations. They buy low and sell high.

You shouldn't use them for more than about $100.

If you need cash, you get it from ATMs in the country you are visiting.

Why aren't you peeved about the exchange rate at the hotel in Costa Rica?

ira is offline  
Old Aug 12th, 2008, 06:37 AM
  #5  
 
Join Date: May 2003
Posts: 8,218
As a comparison, let's say you have a used car to sell, and you want to find out how much it's worth, so you research the Blue Book value. You'll find out that there are three: trade-in, private sale, and retail.

If you sell it to a dealer, he'll pay you, hypothetically, $3000; if you go sell it to an individual, you may get $3500; if you go back to the dealer the next day to buy the same car, it will cost you $4000. Did he cheat you? No.
abram is offline  
Old Aug 12th, 2008, 07:14 AM
  #6  
 
Join Date: Feb 2008
Posts: 12,985
We had our first experiences changing money this summer - before we had just used ATMs to get cash. This time we went to Asia (Singapore and Bali) and changed US$100 when we got to Singapore and then changed US$ for ruppiah in Bali. So we were aware of the different rates as we went along - and of course we kept track of the published exchange rate so that we could know what was reasonable and what wasn't.

In Singapore, the rate at the airport was much better than at our hotel - the hotel rate was terrible. I don't know what it would have been if we went to a bank or money exchanger in town (rather than the airport).

In Bali we didn't see a whole lot of difference between the airport exchange and exchanges in the towns we visited. Of course, the rate to sell ruppiah and buy dollars wasn't as good, so before we left Bali, we did last minute shopping at the airport and spent our remaining Ruppiah More fun than just changing money.
november_moon is online now  
Old Aug 18th, 2008, 05:43 AM
  #7  
 
Join Date: May 2007
Posts: 3
We're leaving for Italy next week; I've been watching the dollar rise over the last month ...yea! Wondering if I should buy some Euro's before I leave home so we have some when we arrive? Of course will take ATM card.
judieann is offline  
Old Aug 18th, 2008, 09:20 AM
  #8  
 
Join Date: Feb 2008
Posts: 12,985
I think that for the small amount you would want in cash ahead of time, the actual difference due to the exchange rate and fees between getting euros at your bank, the exchange booth at your home airport, and the exchange booth at your destination airport is probably smalle enough that it doesn't really matter much either way. I'd go with whatever makes you most comfortable.
november_moon is online now  
Old Aug 19th, 2008, 08:50 AM
  #9  
 
Join Date: Oct 2007
Posts: 179
guti_girl:

I use AMEX cheques for most of our travel money needs.

I know that I pay a fee to get local currency when I cash them, but I know exactly what my costs are.

Credit cards and ATM have numerous fees that are not always easy to know and certainly not clearly explained by the banks. The credit card fees can include local exchanges, local user fees as well as international fees.

ATM have limits on withdraw plus transaction and exchange fees for each withdraw. As the withdraw limit is lowered, so the cost of this form increases.

On a recent trip to Costa Rica, I used AMEX cheques, no charge at the purchase. I also have a Scotia Bank ATM. I went to the Scotia Bank in San Jose where I presented my ATM card to identify myself as a Scotia custgomer, my passport for ID and cahsed my AMEX cheques. At one branch near the tourist office, I was charged 1%. At other branches, I was charged 0%. This is the lowest I ever paid anywhere but at least I had no surprises when I got home.

I did use the ATM on very rare occassions and my credit card at even rarer times. With this limited use, I did not worry about the excessive charges.

I expect to pay for what I get, but I like to do the best that I can for myself which includes safety as well as convenience and of course cost.

Some stores and hotels will take AMEX cheques at par absorbing the cost as part of their cost of sales.

In the country side in Argentina, AMEX cheques are not accepted at all. It seems that not only do they pay a heavy price but it takes for ever for the merchant to get their money, up to two months in some cases.

I suggest some local research on the web to the banks and information from other travelers.

Woodie
georgewoodie is offline  
Old Aug 23rd, 2008, 11:19 PM
  #10  
 
Join Date: May 2008
Posts: 77
I think you got ripped off, too. But since many people have said you weren't, perhaps it's just American money exchangers who are gouging the heck out of you.

I recently went to the US, and I exchanged some money at the Japanese post office. I think it was about 112 yen per dollar -- which is a little worse than the official rate, but still, not bad. You have to expect the money exchangers to make some money.

But then, thanks to a screw-up with my credit card, I found myself running short of money in Denver. I went to the bank there (and I think it was TravelEx, but I wouldn't swear to it). And they sold me some dollars for about 120 yen to the dollar!! I mentioned how surprised I was that the dollar had gone up so high in just 10 days, and then he offered to waive the service fee if I bought $500 or more.

Well, I wanted the cash, I had the yen, so I went ahead and did it. And when I got back to my hotel, the yen/dollar rate was still hovering around 110 yen per dollar. Their commission was nearly 10 percent!

So, there are two lessons:

Always prepare to have more money/credit than you need.

Do your homework about the exchange policies in the country you are visiting. And if you ever visit Japan, do your exchanging at the airport rather than one of those exchange places in the US bank. (And the Japanese Post Office is also a safe, reasonable place to exchange money.)

TokachiM is offline  
Old Aug 24th, 2008, 05:14 AM
  #11  
 
Join Date: Feb 2006
Posts: 25,730
Sigh. The cheapest way to get foreign currency is to use an ATM machine. Any other method will involve fees and likely a worse exchange rate. There are a few countries where you can't use ATMs, the US is not one of them.
thursdaysd is offline  
Old Aug 24th, 2008, 07:39 AM
  #12  
 
Join Date: Jan 2003
Posts: 93,669
There is no need to "blog to warn others".

What you "discovered" is common knowledge. If you hadn't skipped over the money exchange information posted on various Fodor's forums daily, you would have known all this.

Typically airport exchange rates is not as good as after you arrive wherever you're going. Changing back into USD is never going to be great idea.

I guess it's always good to remind people new to traveling, but this is no surprise. TravelEx is a businesses and yes you do pay premium for the convenience of airport exchange. This does not mean they "cheat you".


suze is online now  
Old Aug 25th, 2008, 02:14 AM
  #13  
 
Join Date: May 2008
Posts: 77
Sooo, what kind of fees does an ATM charge per transaction? Say, like, drawing from a Japanese bank? And what fees will my Japanese bank charge me for taking money from a foreign ATM?

Moot point for me, since I won't be travelling overseas for awhile. I just have a feeling my best bet is the Japanese post office.

I don't know why so many people are getting snooty about this question -- if you don't ask, how will you know? Maybe all this received wisdom is wrong, and there really is a better way to exchange money.

It sounds like for US travellers, the best bet is using an ATM card. However, I would double check with my bank before I took this advice as gospel.

Some friends gave me some terrible advice recently about how "outdated" travellers' cheques are, and I found they were really quite convenient this time around. That's why I'm taking the advice here with a large bucket of salt.

Cite me some fees, and real-life examples, please.

(And I still think charging about 10 percent more than the exchange rate is somewhat extortionate.)
TokachiM is offline  
Old Aug 25th, 2008, 05:17 AM
  #14  
 
Join Date: Feb 2006
Posts: 25,730
The fees you are charged for ATM use are set by the bank that issued your ATM card. Call your bank and ask them what they charge you to use a "foreign" ATM (i.e. not one of theirs) and what foreign conversion fee (if any) they charge. My bank recently went from 0% to 1% foreign conversion fee, and if I were less lazy I'd look for a new bank. I have never heard of the "foreign" ATM itself charging a fee.

Note that your credit card, unless it's a Capital One card, almost certainly charges you a foreign conversion fee of as much as 3%. There have been extensive discussions of these fees on the Europe and Asia boards here - note that guti-girl said that she "skated past most of the money exchange information".
thursdaysd is offline  
Old Aug 25th, 2008, 06:35 AM
  #15  
 
Join Date: Jan 2003
Posts: 93,669
Tokachi~ It depends on your own home bank, how much you will pay for a foreign ATM transaction.
suze is online now  
Old Sep 30th, 2008, 07:44 AM
  #16  
 
Join Date: Oct 2007
Posts: 179
guti_girl and all:

Why would changing money NOT cost the traveler?

ALL business have overhead. Rent to pay, staff to pay, insurance coverage, employee benefits and many other costs, not to mention risk.

After those costs, who ever invests into that business will expect a return. Wouldn't you?

So changing money will always cost money.

Some will always charge more and some will be a little sharper in the market place and charge a closer to cost price.

Anyone who thinks that changing money is free is delusional.

I am not, nor have ever been a banker or in the money business but I don't think it is a NOBRAINER to realize these facts.

So suck it up and either pay the price or don't travel.

Nothing is free.

Get used to the idea.

Woodie
georgewoodie is offline  
Old Sep 30th, 2008, 09:38 AM
  #17  
 
Join Date: Apr 2003
Posts: 36
i agree - money changers in whatever forms exist to make a profit. These are businesses, not some non-profit organisations. Some travellers wants to "make" the most out of such exchanges; others don't mind paying more for the service &/or convenience.

november_moon
I can't comment on exchange rates for hotels and banks in Singapore since I never deal with them due to their uncompetitve rates. But any given day, I would change my money with any money changers in town than with the airport.

cin_sg is offline  
Old Dec 27th, 2008, 01:01 PM
  #18  
 
Join Date: Mar 2006
Posts: 43
Money is a commodity and there are costs associated with the buying and selling of it, just like there is with buying any commodity. I used to use Traveler's Checks until nobody would take them anymore because of all the counterfeiting and losses. Then we switched to credit cards (which have conversion charges) and ATMs (which have fees and may not always work, thre is a good travel magazine article about why the system shuts down occasionlly). We sometimes even buy currency on the street when the rate is good and where we have friends who know which dealers can be trusted.
atp2007 is offline  
Related Topics
Thread
Original Poster
Forum
Replies
Last Post
Vicky
Europe
33
Aug 24th, 2017 07:00 AM
gregtdot
Mexico & Central America
6
Apr 16th, 2011 01:43 AM
Kaneez
Mexico & Central America
45
Apr 7th, 2011 02:17 PM
robyn_tania
Europe
13
May 15th, 2007 08:56 PM
angellynn
Caribbean Islands
10
Jul 19th, 2005 11:36 AM

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are On


Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Do Not Sell My Personal Information

FODOR'S VIDEO