International Travel: Where do I exchange currency?

I do a lot of international travel and its always tough deciding where do I exchange currency.  Should I do it at my departure airport, on arrival, at the hotel, downtown or at an ATM?  I’m sure you have the same issue when you travel internationally.

I’ve had several conversations with my friends about which method is better/gives you the best exchange rate.  With the USD falling against most currencies, you do have to watch every dollar you spend when you travel.

So, with that in mind, I did a little research and here is what I found in three major international cities in Europe: London, England; Berlin, Germany and Paris, France.

London, England

I started at my local airport in Houston-Intercontinental where the rate was $1.84 to 1 GBP with a flat rate of $7.95 per transaction. So, it would cost me $44.75 to get 20 GBP.  Once I arrived in London, England at the Heathrow airport the Travelex currency exchange booth at the arrival area had an exchange rate of $1.82 with a 3 GBP commission.

I then continued my journey into Central London where the foreign exchange booths all over the place were asking $1.75 with no commission.  While shopping around on this “where do I exchange currency? mission,” I met a guy in a local eatery and he told me that you can exchange money at the post office without any kind of commission.  Pretty awesome I thought.  The only thing is that I needed to find one; it was Saturday p.m. and they were closed.  It was good to know though that this was an option that required a little planning in the future.

My online research of the UK post office shows that although they have no commission, their rate is about $0.06 higher than the bank exchange rate.  Still a lot lower than the airports and the downtown places.  You can the post office information at http://www2.postoffice.co.uk/travel/travel-money/foreign-currency.

Once I completed my journey and made it back to airport for my departure. I decided to check the rates at the ATM.  It was $1.7239 plus there is a foreign transaction charge and possibly an ATM charge as well.  I also bought a WiFi card for my phone for 10 GBP and paid $16.42 plus a $0.49 (3%) transaction fee from my bank.  Note that there are some credit cards that don’t charge you any transaction fee, so consult your bank on this one.

So despite the fee from my bank, it had the best rate since there is no markup on the currency exchange rate.

Berlin, Germany

So where do I exchange currency in Berlin, Germany? Here is what I found:

I did not do as much extensive research as London, but at the airport, the exchange rate was $1.56 for a EUR (I remember when it was $0.85), plus a one-time fee of 4.20 EUR in addition to a 2.2% commission!  Incredible, I thought as I shook my head and thanked the lovely lady behind the thick glass.

I then took the TXL bus (clever as it matches the airport code) and headed into the city.  I had arrived on a very early flight and as such, the foreign exchange booths around the tourist spots were still closed when I passed the Berlin Tower at the Alexanderplatz train station.  I took money out at the ATM; when I got home I noticed that the exchange rate was $1.4444 with a $0.87 (3%) transaction fee and my bank had charged me $5.00 for the using a non-bank ATM :-(.  Back in Houston, TX at the Intercontinental airport the exchange rate was $1.5344 with a $7.95 flat commission rate.  This is a lesson on how to make money from selling money.

Paris, France

In Paris, France, the results of my where do I exchange currency? odyssey were similar.  The exchange rate at the very crowded exchange counter in Terminal 1 of the Charles de Gaulle (CDG) airport was $1.58.  As the lines were pretty long, I was unable to verify the commission rate and it was not displayed on the currency exchange board.  Their exchange rate though was $0.14 above the bank exchange rate so already this is not a good deal.

I made a purchase at the airport for dinner (a chicken sandwich on a baguette) and that exchange rate was $1.4444 with a 3% transaction fee when I checked my bank.  I did not make it to the city as this trip was to Le Bourget for the Paris Airshow; I was charged the same exchange rate and the 3% transaction fee when I bought my RER B train ticket from the Le Bourget train station to Paris CDG 1.  I did not have an opportunity to stop by a foreign exchange place at all.  The exchange rate back at the airport in Houston was about the same as I had when I visited Berlin; $1.5344 plus a flat commission rate of $7.95.

Summary

So what my little research showed is that it is best you use your ATM card to exchange currency.  However, you should check your bank to see if there is a charge to use another bank’s ATM.  Also, some of the international ATMs will charge you a fee for using them.  Sadly, one of my banks charged me an international ATM fee, plus the standard 3% foreign transaction fee.  Despite this though, it is still cheaper than changing money at an exchange booth/counter.  Not to mention more convenient.  Also, remember that there are several credit cards that does not charge a foreign transaction fee (like the Continental Chase Presidential Plus card), so do some research to find the best deal.  Here is a chart of the findings:

		Where do I exchange my currency?
London
Amount	20 GBP
		Dept. Airpt.	London-LHR	In the City	ATM	My Bank
	Exch. Rate	1.84	1.82	1.75	1.7239	1.6395
	Comm./Fee	$7.95	3 GBP	None	None	$0.98
	Rate*Amt.	36.8	36.4	35	34.478	32.79
	Total Cost	$44.75	$41.86	$35.00	$34.48	$33.77
Berlin
Amount	20 EUR
		Dept. Airpt.	Berlin-TXL	In the City	ATM	My Bank
	Exch. Rate	1.5344	1.56		N/A	1.4444
	Comm./Fee	$7.95	4.2 EUR		N/A	$0.87
	Rate*Amt.	30.688	31.2		N/A	28.888
	ATM Fee					$5.00
	Total Cost	$38.64	$37.75			$34.75
Paris
Amount	20 EUR
		Dept. Airpt.	Paris-CDG	In the City	ATM	My Bank
	Exch. Rate	1.5344	1.58	No data	N/A	1.4444
	Comm./Fee	$7.95	Unsure	No data	N/A	$0.87
	Rate*Amt.	30.688	31.6	No data	N/A	28.888
	Total Cost	$38.64				$29.75

What has been your experience? I’d like to hear about it.  Please make a comment below.