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buying euros ahead of trip to keep costs down?

Just heard another report about how interest rates are likely to be cut again and with that, the value of the dollar is expected to drop even more. Does anyone buy euros months ahead of their trip to Europe and if so where does one get the best exchange while still in the US? Do you not rec carrying that much cash in a money belt? thanks

Posted by
13 posts


My husband and I are going to Italy in 4 weeks, and I actually bought 1,000 Euros yesterday to take with us. The bank still charges a 2-3% fee, but I thought I would take my chances now for the same reason, feds are about to cut rates and the dollar just seems to keep falling. I am hoping I am saving a little bit of money by buying today opposed to waiting until I get over there when the dollar could be weaker and I would still have to pay the 2-3% bank fee. Hope that helps!

Posted by
990 posts

Another reason to think aobut buying euros in advance is to stretch out your paying the expenses of a European trip. Our trip this summer is being paid off a little at a time--the airfare two months ago, then one of the hotels that could be pre-paid I'm paying now. I'm giving serious thought to buying some pounds and euros this month. I know the unavoidable costs on my credit card once we go will be bad enough to face when we get back!!

Posted by
223 posts

I'm not an economist, nor do I know much about the economy and the forces that moderate the dollar's rise and fall.

However, I think the pitfall of buying Euros in anticipation of the dollar's fall is that if it goes up, you've just lost more than you would have. I guess it depends which way you want to gamble it.

Of course, I didn't think the dollar could have fallen much more than when I was in Europe last summer and it is even worse now. So, in hindsight, I would have been better off buying a bunch of Euros then for my next trip.

The problem with this scenario is that you'll only know if you made the right choice or not in hindsight. You have a 50/50 chance of being correct either way.

I do like the idea of buying a bit at a time to average your costs over time though. If the fees are the same at your bank (i.e., not a per-transaction fee), that might be a good way to go.

Posted by
2779 posts

For the first time in history today the dollar fell underneath the 1 Swiss Franc mark. For a few hours today $1 only bought CHF 0.99! In the 1970s, when the dollar was still backed by gold, $1 bought CHF 4.30. Since the dollar became a fiat currency in the Nixon years it's seen a slow but constant decline in value. ( Personally I'd also consider buying Francs now as there are no indications that the dollar could be strenghtened any time soon. The US government has no interests in a strong dollar as the less the dollar is worth the less bad news your record deficit is.

Posted by
4125 posts

You may hedge your bets that way, but for you to break even the dollar must fall enough to repay you for the commissions and fees you will pay plus the interest your money would have earned in a CD or bank account.

Then there is the risk and trouble of holding that much cash as you travel.

Of course if you know where the dollar will be when you go, the answer is a lot clearer. Otherwise the question is complicated by uncertainty.

Posted by
54 posts

My money market is making almost nothing right now and my bank charges nothing for its customers to change dollars to euros so I think if interest rates are cut again, I'll be glad to already have my euros. I guess carrying them might be a problem but I'm old enough that someone would have to be terribly desperate to go for my money belt and I'm not yet old enough to not notice. I think I will try to prepay all my hotels so that I just have to carry food/fun money. Pretty soon we are going to have to find new places outside of Europe to travel.

Posted by
108 posts

Can anyone speak to the practibility of opening an account in Europe now and getting an ATM card for withdrawl later?

I'd gladly buy several thousand Euro's now for my trip this summer (I don't see the dollar gaining any value before November). But what do I do with the 5,000 Euros I would get from my bank, presumably in cash? I don't think it's safe (or legal?) to carry that much cash from the US abroad.

Posted by
22425 posts

Several people have posted that their banks are not charging for currency conversion. I would like to know your rate because I am sure that there are fees buried somewhere. Second, in the Denver area I had not found anyone who would convert currency at less than 8% to 12% -- my bank, AAA, credit union, American Express, etc. If your bank is willing to convert currency at the interbank currency rate with no up charge, do it. It is a win, win situation. Under the best circumstances your debit card in Europe will give you the interbank rate plus 1 to 3%. And that is still a pretty good deal.

Posted by
552 posts

Jason's question is a good one.

A Swiss "asset protection" account is not quite practical. Even if the minimum balance is not a huge amount of money, these accounts tend to be set up by brokers who I'm sure charge plenty of commission to get you set up.

The next obvious step is finding a bank in a country on the Euro that will allow non-residents to open an account and, here's the kicker, not require you to show up in person to open the account.

There are some in Germany, but since all forms to fill & other correspondences are done it the native language, I chose the Italian firm, Sella World Service, as my latin language skills are slightly better.

They offer a pre-paid payment card. I signed up for it. Filling out the form was a challenge. Our Nazione is Stazi Uniti.

I'm still guessing that a Notary Public will be required at some point, if by some miracle I'm able to pull this off.

I'll let you know.

And of course, anyone else with more insight is welcome to chime in.

Posted by
12040 posts

This only applies to people with military connections, but USAA charges less than 0.25% conversion fee on ATM withdrawls in Europe. What the exact rate is, I couldn't tell digging through my own records. For some reason not known to me, there was no fee on some withdrawls and only a marginal fee on others. Perhaps it varies by what bank owns the ATM.

Posted by
264 posts

The "no-fee" withdrawals were made at a European bank's ATM that has a correspondant relationship with your American bank. Your bank will tell you which ones they have when you call them to let them know you will be in Europe. I try to stick with those exclusively. On the few days that I could not, it was a big OUCH! Example: Bank of America has a correspondent relationship with BNP in France. Gotta love those "no-fees."

Posted by
12045 posts


And they charge no fee to use any ATM in the world.

USAA is a good deal for military. I think they will take you if a parent has had any accounts with them also.

The other good one for military is Navy Fed Credit Union, they recently opened up their enrollment to all military instead of just Navy.

Posted by
1 posts

Hi all...Before my trip to Germany last summer (2007)I checked a few banks that issued an ATM card with a savings account that could be used internationally. I found that most companys charged a 3% International Transaction Fee. However, at that time, Capital One had no International Transaction Fee with their card. So I opened an account (with a decent interest rate) got the ATM card and went to Europe. The only limitation on the card was a withdrawal limit of $300.00 per day. But then since I was alone, that was fine. A other point is that the exchange rate is set when the transaction is made at the bank. That was the best deal I could find.

Posted by
2436 posts

Please understand that no bank converts currencies for free. They may not charge you an explicit fee, but they make money on the transaction by giving you a worse exchange rate than they have to pay. Just ask what exchange rate they are using and compare it to what you find in the newspaper or online. No matter how you pay for your European expenses, you are paying something for the exchange. No one exchanges money to be nice. Credit card companies make something, your bank makes something, etc. I was just in Scotland and some stores I went to gave me the option to pay in pounds or dollars. If you select dollars, don't think it means there is no exchange. They are using an exchange rate to convert their currency to dollars and it might be much worse than the one your credit card uses.

As for guessing which way the exchange rate will move between now and your trip, that is gambling. But you're gambling whether you convert to the other currency now or later. Just make sure you take all the costs into account. The advantage of converting today is you know what you will be paying. But I don't like the idea of having all that cash sitting around.

Anyway, my point is, there is no such thing as a free lunch when it comes to currency exchange.

Posted by
12045 posts

You can legally carry cash. You have to declare it. There is a limit but I believe it's $10,000.

Whether it's safe or not is another question and it can always spotlight you for further scrutiny at customs.

Making a currency decision involves risk. There is a risk to waiting that the Euro will keep going up. There is a risk buying Euros that something happens and the market changes. I don't usually try to outguess markets but I would buy if a deteriorating dollar could affect your travel plans. Buying Euros now essentially locks in your price. If the Dollar recovers you would have essentially bought your vacation at a higher price than if you waited.

U.S. monetary policy right now seems focused on propping up the mortgage market which means lower rates. A week or two ago, I heard rates were being raised in Europe. All other things being equal, that should signal a weak dollar for the near term.

Usually when everyone agrees something is going to happen is when the exact opposite is sure to happen.

Posted by
192 posts

I purchased Euro travellers checks from my bank to use to pay the hotels and to have in case of emergency. I liked having a little cash on hand in case there was a problem with the ATM.

Posted by
831 posts

I know of no place in the US that you can buy several thousand or less euro for less than 5% over the interbank rate. I do know of ATM cards that will give me euro in Europe for 1% over the interbank rate see
So to come out ahead the dollar must fall more than 4% (this doesn't count what you lose from not having the money invested).

If you think that you can exchange dollars for euro in the US at interbank rates with no additional expense you don't know enough to speculate in the currency market.

Posted by
805 posts

Henry's right. It really makes no sense to buy euros ahead of time as a currency hold unless you really think the value will go WAY up. Even then, the opportunity cost of buying the currency now is high.

Posted by
1358 posts

I always limit the amount of currency I carry. And I always carry it in a NECK POUCH. Much easier to get to and put away than a money belt and I know It is always down the inside of my shirt and riding on my belt.

I always use ATMs regardless of cost because they are so easy to find and easy to use. I have found them outside banks, at supermarkets, service stations, post offices, hotels, RR stations and air and bus terminals.

Posted by
1 posts

I too am going to Europe later this year around May. From what I have been reading in the Wall Street Journal and other online sources is that there will be a major correction in the exchange rates because of the econmic chaos in Europe. The euro may be devalued,interest rates cut,similar to what the U.S. did recently.
The bottom line. Wait till you absolutely need to cut your exchange deal and get on line with a financial reporting service where you can monitor the strength or weakness of the Buck vs. the Euro.

Posted by
9363 posts

I don't worry too much about what the dollar does against the euro. Whatever happens will happen. If I'm planning a trip, I'd much rather spend my time planning what to see and where to go rather than stressing about whether I'll get euros for $1.50 or $1.55. Over the course of my trip it won't make that much difference in my budget. And if it turns out that I spent more than I would have because of an exchange rate change, so be it. At least I'm spending it doing something I enjoy. And sometimes you can get a surprise the other way. On my recent trip to Costa Rica the dollar improved against the CR currency while we were there. It was 500 colones to the dollar when we left, changed to 550/dollar halfway through the trip.

Posted by
2 posts

But I had so much trouble cashing AAA travellers checks in Spain, even with good conections in Leon, that I will keep a thousand euros in my pouch whenever I go back. (spread around several places like my pouch, my wifes, a little in my carry on, and as soon as i arrive, some with my wife's family.)

Thanks for the tip on ATM cards.

Posted by
4 posts

What will happen to the Dollar to Euro rates if the US defaults after Aug. 2. Would it be a good idea to buy Euros prior to Aug. 2?

Posted by
4535 posts

Why bump a 3 year old thread? Who knows what will happen to the dollar. It's why we recommend against pre-buying Euros, none of us are financial futures traders and unless you are too, I wouldn't start now.