Buying currency to go abroad is always an interesting experience.
And by interesting, I mean mind-boggling.
Especially since the vote for Brexit (United Kingdom to leave the EU) occurred, it’s been a little more tougher – mainly as the UK pound has dropped in value when buying other currencies.
Some good examples as on XE.com – here’s some links to USD and Euros.
At the time to writing (late 9th October), the spot prices were US$1.24351 to £1, €1.11081 to £1. These as we know are spot prices, and when going to a bureau de change, offers like free commission or a commission price is slapped on top.
Here’s what TravelEx were offering at the time of writing:
Screenshots from TravelEx.co.uk
So lets review:
US$/£ €/£ Spot 1.2435 1.1108 TravelEx 1.2210 1.0960
With about 2% commission, these numbers seem “not bad” (Considering I was nearer $1.5 to the £ in March/April… it’s still painful).
However, there are some airport currency exchange firms that will take it to the limit. Let’s look this example from MoneyCorp at London Gatwick Airport – taken by Martin Lewis Smith on Money Saving Expert fame
No wonder they shouted at me “you’re not allowed to photograph that”. DIsgraceful exchange rate profiteering at Moneycorp Gatwick. pic.twitter.com/jdz0Nnzzck
— Martin Lewis (@MartinSLewis) October 9, 2016
The headline rates should make you wince, but I’m just focusing on USD/EUR in this article. And the rates are nothing short of disgusting:
These rates are nothing short of bad, with US$ under US$1.10 to the pound, and under €1 per £1.
US$/£ €/£ Spot 1.2435 1.1108 TravelEx 1.2210 1.0960 MoneyCorp LGW 1.0828 0.9741
Considering the spot rates vs Moneycorps rate… it’s nothing short of daylight robbery.
So I urge you please do not exchange you cash at an airport. Instead:
- Order your money ahead
- Buy it a Bureau de Change
- Use a product like Curve or TravelEx’s SuperCard
Just don’t buy it from an airport. For your own financial health.
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Danny says
I was in the Manila airport on Saturday. The PHP rate was 48.20 for the USD at the airport exchange. I thought the airport was always higher so I waited to go to my favorite exchange in town which is always better. I arrived the next day at the favorite exchange and it was 48.00. Go figure…
Patrick says
Any idea how rates compare if you buy from your local bank before you go?
marcus says
Went thru Tokyo Narita in May and the exchange rate was only about 1 to 2 % off the spot rates. Blew my mind and made me double check my math. Very surprised and delighted.
TonyM says
Through all our travels in Europe we never ‘bought’ money. We found that using the bank owned ATM machines in train stations and airports you got a better rate than if you went to any bank owned ATM machine in the city.
Rich says
Saying “NEVER buy currency at an Airport” is too general. There are lots of airports where the rates are perfectly reasonable. I’ve always found them to be just fine in Japan.
An easy way to check whether the rates are reasonable is: Take the ratio between the “buy” and “sell” rate; subtract 1; divide by 2; think of it as a percentage rate. That’s very approximately the penalty you’re paying for conversion. So, for the dollar/pound exchange rate in the picture, take the ratio (1.4979 / 1.0828 = 1.3834); subtract 1 (0.3834); divide by 2 (0.1917); think of as a percentage (19%). That’s amazingly awful. (This approximation gets worse as the penalty gets worse, but it’s still a guide as to how bad the rate is.
Short version: If the “buy” rate is less than 6% more than the “sell” rate, you’re paying less than 3% penalty.
(I always get cash from an ATM, where I’ve never gotten a bad rate. On exit, I pay down my hotel bill with my leftover cash.)
Suzanne says
I don’t think you should be that categorical in your advice.. I think the message should be, know the exchange rate before you buy, and don’t buy at the airport if it’s too far off what you expect. But in some countries, the airport foreign exchange outlets actually offer reasonable rates. Two years ago when I traveled in Burma, the best rates available for tourists all through the country were at the airports. I didn’t take advantage of this when I landed in Rangoon, but didn’t make that mistake again.
Suzanne says
I don’t think you should be that categorical in your advice.. I think the message should be, know the exchange rate before you buy, and don’t buy at the airport if it’s too far off what you expect. But in some countries, the airport foreign exchange outlets actually offer reasonable rates. Two years ago when I traveled in Burma, the best rates available for tourists all through the country were at the airports. I didn’t take advantage of this when I landed in Rangoon, but didn’t make that mistake again.
Tom says
Just go to an ATM. You’ll get the best rates.