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Conflicting advice about cheapest way to get local currency (Europe)

On this website, Steve writes: "Don’t buy foreign currency in advance. Some tourists just have to have euros or pounds in their pockets when they step off the airplane, but smart travelers don’t bother and know better than to get lousy stateside exchange rates." He goes on to say the best strategy is to get money out of the ATM at the airport of arrival.

https://www.ricksteves.com/travel-tips/money/cash-tips

But according to Nerd Wallet: "If you need fast cash, you’ll get the worst deals at the airport upon arrival..."

https://www.nerdwallet.com/blog/banking/exchange-currency-paying-huge-fees/

This website says: "When possible, your best bet may be to change currency through your bank or credit union before you depart."

https://thepointsguy.com/2016/10/where-to-exchange-currency/

So why the conflicting advice, and what is the best answer?

Posted by
2092 posts

It all depends on your comfort level. I travel solo and like to hit the ground with some currency at the ready, because if there was a problem with my card (i.e., a month before my trip this spring my debit card was compromised and they shut it down immediately--what if that happened while I was abroad?) and I couldn't get cash, I'd then be using a credit card for a cash advance and that's never a good idea unless you are desperate. By the time I need more I am comfortable in that city and have scoped out an ATM to use. I figure out what I need to get from the airport to my hotel, buy a transit pass and food and that's what I order from my bank. I do use my credit card when travelling, of course, but cash keeps me more aware of how much I'm spending on non-essentials.

Posted by
2525 posts

The cheapest method for gaining foreign currency is to use a no foreign transaction fee ATM card, that also rebates any fees if charged by bank ATMs. Period. Search this forum for more than you care to read.

Posted by
795 posts

NerdWallet suggests using your bank's ATM network, and that's what Rick Steves recommends as well. Most airports have a number of ATMs. What you want to avoid is the currency exchange bureau there.

The text you quote from The Points Guy comes in the section where he discusses traveling to locations where ATM machines may not be available or reliable.

So I don't see much conflict. Best answer is an ATM that is affiliated with your bank, wherever you find one.

Posted by
6178 posts

There are a lot of nuances between the different advice. In general, anything that requires human labor or passes through someone's hands will cost more - it's an administrative fee for physically ordering something, paying for postage fees, etc. Although getting money at an airport ATM is generally fine, some airports have a disproportionate number of ATMs that are of either the Travelex variety (non-bank ATMs) or ones that specifically target the captive audience of passengers with additional flat fees that you wouldn't see in normal ATMs in city centers. That's why they're not always the best bet. You have to actually search out the best ATM to use sometimes. But, even if you get a turkey ATM, you can skirt around it by simply withdrawing a minimal amount that will tide you over until you get into town (obviously, you're better off with ATM debit cards that don't charge you a flat fee with every transaction - otherwise, you're incentivized to remove large chunks of money to carry around in order to minimize the number of withdrawals).

The way you get a definitive answer is simply to compare your options and do the math. The bank has to state its fee for making exchanges and the exchange rate...compare it to the current interbank exchange rate (available online) to figure out the bank's markup. There will be a markup - no service is free. Some people will gladly pay extra to arrive with money in their hand - they believe that the extra cost is a worthwhile tradeoff for their anxiety (in arriving without any cash on-hand). Other folks, myself included, are perfectly comfortable without having cash on hand and use an ATM upon landing (I have no stress over any of this stuff). When picking out the best method for you, count the physical expense and the emotional expense, if any (of feeling comfortable, avoiding stress, saving a minimal amount of time by having cash ready to go, etc.)

Posted by
203 posts

If there was one best answer, I guess there wouldn't be conflicting opinions on this topic. I think our host meant to be a bit more specific with recommending getting money out of an ATM upon arrival as RS always recommends in his books that you need to make sure you get your cash from a bank ATM. That way, you protect yourself from high fees and it is less likely you will fall victim to ATM scamming devices. So, I think an ATM at a bank in Europe is the way to go. I will say, though, that I don't fully agree with Rick Steves advice to bring cash (US $) to Europe to protect you in case of a lost card or your ATM card getting eaten. Let's say your ATM card doesn't come back to you during you initial withdrawal (this happened to me in Belgium) so you are left with credit cards and $300 to exchange overseas. While it is true you can shop around to find a currency exchange that will have good rates, this task would be time consuming and a bit hectic. So, for me, I head to my local bank that has competitive exchange rates before my trip and land in Europe with 300 or so Euro in my pocket (or backpack). One less thing to worry about. My two cents.

Posted by
20632 posts

There is no conflict ---- the cheapest and most convenient way to obtain local currency is to use a debit card at a bank owned ATM in the country that you are visit. Bar NONE! There is no argument or discussion on this point. Sometimes you cannot find a bank owned ATM at an airport so having a hundred euro in your pockets when you land is helpful.

Posted by
5316 posts

And this can be a first-trip-only dilemma -- many people who travel frequently make sure they take home an extra €200 (rather than converting everything back to home currency) so they already have walking-around cash when next arriving in Euro-land. Of course, this doesn't work if your first stop is London or Prague or ...

Posted by
3313 posts

"If you need fast cash, you’ll get the worst deals at the airport upon arrival..."

This refers to exchanging actual cash at an exchange booth. You will always get the worst possible deal at any exchange booth at any airport whether it is the one you depart from at the start of your trip or the one you arrive at. You are paying the salary of the bored person who sits at that desk all day and (these days anyway) helps very few customers.

The absolute best way to get cash at your destination is through a bank operated ATM as others have mentioned especially if you have a no fee debit card.

If you really really want to have some Euros or Pounds or whatever in your pocket on arrival, your bank is the best place to get it because the rate, while not great, will be much better than the airport exchanges. If your own bank doesn't handle foreign currency, Wells Fargo supposedly does even for non account holders and have a decent exchange rate.

Posted by
11613 posts

It depends on whether bank-owned ATMs at airports are being replaced by currency-dispensing machines like Telex, etc. if you can find a bank-owned ATM at the airport, that is the best method.

If this is your first trip and/or you have no leftover euro, and are mathematically challenged after a long flight, you may feel better arriving with €100-200 obtained from your local bank. You can ask for specific denominations, so get €5, €10, €20 notes and not have to break a €50 for a cup of coffee.

Posted by
2045 posts

And Nerd Wallet has not even tested their comment about airport ATMs such as Travelex. As I have done and posted, and it has been cited here many times, I did a test of the Travelex ATM at Heathrow (since BA gave them a monopoly). And I got the same exchange rate that I received at a NaTWest ATM in towm later that morning. No fees, and avoiding DCC was no problem.Actually Nerd Wallet didn't even attempt to investigate this, they just made a dismissive overall blanket statement.

Seems to me that the conflicting information is elsewhere OTHER than here

Posted by
4078 posts

Nerd wallet is referring to the forex bureaus at the airport, clearly. Not to ATMs.

I think it is a dumb idea to bring tons of cash with you on an airplane anyway and to carry around huge amounts of cash generally.

Use in the ATM in Europe every other day and get what you need for that timeframe.

Simple, really.

Posted by
10831 posts

My bank gives nearly the same rate of exchange as does the ATM. So if I want to,arrive with 100 euro in my pocket it costs me something less than $2. I dont try and over engineer a trip. I just go and enjoy and I suppose that attitude costs me $100 on a 16 day trip.

Posted by
3320 posts

Generally speaking the least expensive way of getting local currency is from an ATM that is affiliated with your bank at your destination. However, it's always a good idea, in my opinion, to have some local currency in hand when you land. Getting two hundred Pounds, Euros, or whatever the local currency is from your local bank will cost you a little more, but it eliminates the hassle of trying to find a machine, the stress of hoping it works (they do occasionally malfunction), and doing it all while somewhat jet lagged. To me the small amount extra it cost to have money in hand when arriving is money well spent, and the extra cost relative to the overall cost of the trip is not, in my opinion, that much. Just one point of view

Posted by
5504 posts

Yes, Bank sponsored ATM at destination are generally the cheapest way to go for FX. Your debit/ATM card's financial institution generally dictates the "cost" of the FX transaction with the sometimes exception of the ATM owner adding a surcharge.

And it all happened 50 years ago in the UK: https://www.reuters.com/article/us-atm-anniversary-idUSKBN19I166

World's first ATM machine turns to gold on 50th birthday

The brainchild of Scottish inventor Shepherd-Barron, the first ATM
(automated teller machine) was opened on June 27, 1967 at a branch of
Barclays bank in Enfield, north London, the first of six cash
dispensers commissioned by the bank.

Posted by
5026 posts

You have to read any advice in the context in which it is written. The sites you quoted were in reference to specific situations. That's what makes "what is the best . . ." - questions, hard to answer.

Posted by
17657 posts

In all my travels, I have never encountered a Travelex ATM (maybe because Travelex is a British company, and I go mainly to Germany), so I don't know what that rate is. However, I did see a Travelex exchange counter in a US airport. The airport had Wifi, so I sat down and looked up the Interbank rate (Oanda). Travelex's rate was 14% more than the Interbank rate (ouch!). It doesn't have to be so high because of going through a person, because at my local Wells Fargo, I can get euro from a person for 5% over.

BTW, I'm one of those people who goes to Europe with some local currency in my pocket. Yes, it would be rare for you to not be able to use an ATM on arrival, but it can happen (technical problem with you card - it's happened to me, Internet down and all ATMs not working - it happened to me once in a small town in Germany; no reason it couldn't happen at an airport, or ATM service people on strike - hasn't happened to me personally, but I've heard of it happening at the Rome airport). It's not so much the probability of it happening as it is the consequences (see "The nature of the wager" by Pascal).

Posted by
17 posts

I used the post office in London, which was recommended but would not do that again. I also used a no fee ATM at a Santander Bank and paid less than 3% from my bank. However, I used my no foreign transaction fee credit card for everything i could and that was best.

Posted by
3313 posts

Lee,

The Travelex booth at the airport has a high markup because that person is doing a single task, exchanging currency, and the rent the airport charges is probably much higher per square foot than the stand alone Wells branch. What they make from that single task has to pay all of the costs. On the other hand, the person helping you with your currency order at Wells probably has multiple tasks to keep them busy all day and provide other sources of income to offset their salary (teller, new accounts, branch manager, or whatever) and the rent on the property is a sunk cost even if they sell zero foreign currency.

Posted by
5504 posts

A friend relayed a story about needing to get a small amount of cash at an English pub. He made the mistake of using a "private" ATM at the pub to get 20 GBP. The ATM vendor added something like a 5 GPB surcharge, 25%.

The following link explains the benefit of a private ATM:
http://atmmoneymachine.com/start-an-atm-business.html

Most of our start ups earn their entire investment back inside of 6
months then earn profits for years and years Each ATM placement is
win-win. You make the surcharge revenue and the merchant where you
place the ATM makes more in new cash spending.

The ATM business is extremely profitable, and anyone can get into it,
but most people have no idea!

Posted by
711 posts

The information above is right as far as it goes. The little point that nobody has bothered to mention here is: What happens if after you have made all your calls to the bank notifying them of your foreign travel, the bank drops the ball and your card is declined?? Happened with my wife and Bank of America a few years ago. I t was a minor inconvenience since my bank did not drop the ball. I will give them credit, B of A was also a total pain in the ass about reactivating the when we got back

Spend a couple bucks here and land with cash in your pocket. Then make it a point to use your ATM card shortly after arriving to verify that it works and better yet carry a second ATM card just in case.

Posted by
20632 posts

For a long time the standard advice here is a min of two debit cards tied to two different accounts. Within a day or two both cards are tested to make sure they are working. So far we have had good luck and never had a card fail. A few times the ATM would not accept the card so we just moved to the next week. However, we always try to use a terminal at the bank during open hours and just after someone else has used.

Posted by
2525 posts

Some debit/ATM cards tied to a single account can have different numbers, so the risk of being marooned is greatly greatly reduced. I also take a back-up ATM card tied to a different bank/account. I've never used a first or second back-up card.

Posted by
17657 posts

Mark, reminds me of an old joke. To paraphrase,

"At 14%, you're not going to exchange much currency."

"At 14% I don't have to exchange much currency".

Can you imagine someone going to Europe with $5000 cash and exchanging it for euro at the airport at 14%.

Posted by
258 posts

Lee,
That does happen. I encountered 4 older women last year in Milan. I was flying out, they had just arrived. The trip "leader" was asking me where the group could exchange their dollars at the airport (they were heading to the airport to catch the train to the Centrale). On the recommendation of the "leader" they had all brought dollars to Italy to exchange in Italy to pay for all their expenses in Italy! The "leader" was not aware that euros could be gotten at a much better rate from an ATM. This was the group's first trip to Europe. I felt bad for them all and have often wondered how their trip went since none were familiar with deep storage of critical items.

Posted by
1069 posts

I agree w zoe and James. I flew from chicago to florence w 2 friends. I had ordered the equivalent of 200 dollars US in euros from my bank. ( this was great cuz it automatically gave me an assortment of bills. We adjusted up the dollar amount to get whole euros. I think the fee for this was like a flat 3 dollars if it was not a rush order)

Meanwhile my 2 friends were going to wait to get to italy and use an ATM. The first went around corner to use it and in her jetlag, even w an english language screen just couldnt figure it out, we finally decided she was asking it for an increment it was no longer stocked for. Anyway, we had already agreed that I'd pay for the taxi to our hotel. Bottom line, i like having some cash. I came home w 10 euros, i gave it to a local kid who was going on a pilgrimage to the vatican.

Posted by
2525 posts

What's so difficult about using an ATM machine even with jet lag (some don't suffer, I do)? Buck up travelers/tourists. It's expensive for me to order foreign currency which has always been available at my arrival airport using an ATM.

Posted by
100 posts

My personal rule - come with some Euros on hand and get more later from an ATM. This has worked well for me, so I go with it. I try to use my Capital One card as much as I can, but it's nice to already have "local" cash in my pocket. It makes more sense to me to use the ATM vs. exchange US currency, too.

As someone else said, it's all about one's comfort level, so the best answer is to do whatever your gut tells you is best.

Posted by
2525 posts

"Extra" euro are about house awaiting the next trip. We travel to countries not using the euro as well, so need other foreign currencies. Rather than guaranteeing I pay an unnecessary premium for money to start a trip, I just use my ATM card which has no foreign transaction fee, no other fees and rebates fees charged by banks owning the ATMs I use. If the ATMs at arrival airports are empty or broken, I'll slide over to a currency exchange booth with confiscatory rates and gain a minimum amount of local currency to pay for transport and maybe a meal. I've never needed to do so.

Posted by
17657 posts

It's expensive for me to order foreign currency which has always been
available at my arrival

Sounds like you go repeatedly. Bring back enough to start you next trip. That's what I do.

Also, there is a branch of Wells Fargo in Whitefish, MT, but they don't sell foreign currency. But if you have an account there, they will probably get it in from the branch in Missoula, or you can order it online.

Posted by
2525 posts

@Lee: both area branches of that bank in nearby Kalispell offer some foreign currencies onsite. For grins, I checked the rate for British pounds. Gaining 145 pounds (sounds like a weight program) would cost just over $9 more through the bank than just using my ATM card at a bank affiliated ATM in Britain. Why pay that premium? So, I don't and the savings allow a bit more travel.