Exchange Rate
Jun 17th, 2003 | 02:36 AM
#1
Original Poster
Joined: Jan 2003
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Exchange Rate
This question has been posted repeatedly in the Europe forum but it's time to post it here as well. I will fly to New York from Europe next month on a dual purpose (business/pleasure)trip. Apart from using my credit cards I will probably need to change some Eur to USD. Will I get a better exchange rate in New York than in Europe? FYI today's exchange rate in my bank is 1.185
Jun 17th, 2003 | 05:46 AM
#2
Joined: Jan 2003
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In my experience, the best way to acquire European currency is to use your ATM card at a bank in Europe.
My strategy to date has been: credit card for as many purchases as possible; currency from ATMs.
If I buy euro notes from a bank here, I pay about 5% above the bank wholesale rate, which is your benchmark rate for comparison. If you use an ATM card in Europe, you pay about 1% above the spot wholesale bank rate.
Some US banks charge for using your ATM card off net. I use Bank of America and I pay $1.50 for the third off net transaction in one calendar month. I have a second card for a second account as an alternative, just in case!
I also carry a few traveler's checks as an emergency backup. They don't take up much space, and in 5 trips, they have come in handy twice. The exchange rate for them however is like it is for exchanging currency. You are in essence paying for the teller's time to make the transaction.
I do caution people however that if you poke your credit card in the ATM, the withdrawal becomes a cash advance and you pay a sizeable fee on it.
I always withdraw from my checking account. In Western Europe, the banks do not charge for using the ATM machine.
I use my credit card frequently so I don't need to carry as much currency, but the need for currency in Europe is greater than in the USA because, as a general rule, Europe is more currency oriented than we are. (I don't see people paying for groceries with personal checks.)
One word of warning here. Some banks that issue Visa or Master Cards add on a 2% surcharge on non US dollar denominated purchases. I suggest not paying the extra because it essentially buys you nothing. Visa and MC add on 1% for each conversion. The banks that sock you with an extra 2% are providing no additional service because when they get the line item for your credit card bill, the conversion is already in dollar form. I get my card through MBNA and to date it has not added on 2% for non US dollar purchases. As I recall, Capitol One Bank does not charge the extra 2% either, but that statement of course needs verification.
I think you get the worst rate of exchange when you take currency into a bank and exchange it. Another drawback is that banks in Europe will not exchange coins, just paper notes.
Also stay away from exchange windows in most American airports. I have looked at the posted rates in some of the big US airports and you pay about 10% in many cases, which is not good for you at all.
In summary, get your euro notes, or other European currencies from bank machines, use your credit card when you can, and perhaps carry a few traveler's checks in US dollar denomination as an emergency backup. If you want to arrive with a little pocket money, you are best off to order from a large bank, but most of them charge about 5% above the wholesale rate. (Unless of course you can find someone who comes to the US with a wad of euro notes they would like to exchange. In that case you can use the wholesale rate as a beginning point and work out a transaction favorable to all parties.)
And don't believe the "no fee" currency exchange claims. Most of the money changers claiming no fee adjust the exchange rate in their favor and extract from you any charges for making the conversion that way.
My strategy to date has been: credit card for as many purchases as possible; currency from ATMs.
If I buy euro notes from a bank here, I pay about 5% above the bank wholesale rate, which is your benchmark rate for comparison. If you use an ATM card in Europe, you pay about 1% above the spot wholesale bank rate.
Some US banks charge for using your ATM card off net. I use Bank of America and I pay $1.50 for the third off net transaction in one calendar month. I have a second card for a second account as an alternative, just in case!
I also carry a few traveler's checks as an emergency backup. They don't take up much space, and in 5 trips, they have come in handy twice. The exchange rate for them however is like it is for exchanging currency. You are in essence paying for the teller's time to make the transaction.
I do caution people however that if you poke your credit card in the ATM, the withdrawal becomes a cash advance and you pay a sizeable fee on it.
I always withdraw from my checking account. In Western Europe, the banks do not charge for using the ATM machine.
I use my credit card frequently so I don't need to carry as much currency, but the need for currency in Europe is greater than in the USA because, as a general rule, Europe is more currency oriented than we are. (I don't see people paying for groceries with personal checks.)
One word of warning here. Some banks that issue Visa or Master Cards add on a 2% surcharge on non US dollar denominated purchases. I suggest not paying the extra because it essentially buys you nothing. Visa and MC add on 1% for each conversion. The banks that sock you with an extra 2% are providing no additional service because when they get the line item for your credit card bill, the conversion is already in dollar form. I get my card through MBNA and to date it has not added on 2% for non US dollar purchases. As I recall, Capitol One Bank does not charge the extra 2% either, but that statement of course needs verification.
I think you get the worst rate of exchange when you take currency into a bank and exchange it. Another drawback is that banks in Europe will not exchange coins, just paper notes.
Also stay away from exchange windows in most American airports. I have looked at the posted rates in some of the big US airports and you pay about 10% in many cases, which is not good for you at all.
In summary, get your euro notes, or other European currencies from bank machines, use your credit card when you can, and perhaps carry a few traveler's checks in US dollar denomination as an emergency backup. If you want to arrive with a little pocket money, you are best off to order from a large bank, but most of them charge about 5% above the wholesale rate. (Unless of course you can find someone who comes to the US with a wad of euro notes they would like to exchange. In that case you can use the wholesale rate as a beginning point and work out a transaction favorable to all parties.)
And don't believe the "no fee" currency exchange claims. Most of the money changers claiming no fee adjust the exchange rate in their favor and extract from you any charges for making the conversion that way.
Jun 18th, 2003 | 06:01 AM
#5
Joined: Jan 2003
Posts: 4,611
Likes: 0
Only one thing that I don't agree with. Travelers checks are getting harder to exchange and may even have and additional fee.
Easier to put some US cash in the back of the wallet.
Keith
PS If you had a hard time getting a response to this question on the Europe board, it is probably because it has been answered so very many times and folks expect you to search through the answers already there
Easier to put some US cash in the back of the wallet.
Keith
PS If you had a hard time getting a response to this question on the Europe board, it is probably because it has been answered so very many times and folks expect you to search through the answers already there
