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Purchasing Euros before traveling to Europe

Hoping to travel to Europe for the first time in 2010 or 2011 and was considering purchasing some Euros if/when the exchange rate becomes more favorable. Wondered if this was a good idea or not. Any suggestions on how to determine what I good exchange rate would be. I've found historical lists of the Euro -> U.S. dollar exchange rates that might can help.

Thanks

Posted by
160 posts

It's a judgment call based on one's experience. I've gone to Europe three times, and each time I've brought along some Euros (or Kroner, for when I went to Scandinavia). It seems prudent to me to land in a strange country with some of the local cash, since it is much more fluid and immediately useful than a credit or debit card. I've found having cash in pocket wallet to be helpful a time or two.

For example, if you want to buy snacks or water at an airport concession stand after landing, you can do so right away vs. hunting up a cash machine or digging for your credit card. Or, if you land and find out that the next airport-to-city train is leaving in ten minutes, you can buy a ticket that much quicker and be on your way.

In any event, you don't have to buy a ton of Euros before you go. Perhaps fifty to a hundred dollars worth purchased at your bank before leaving would be enough to tide you over until you find a cash machine at your destination. Good luck!

Posted by
6813 posts

This will generate the usual controversy here....

My own opinion is that there's probably no point in going out of your way to "buy Euros" before leaving. You can't win as an international currency speculator (which is what you're asking about). The dollar and euro will swing back and forth. Unless you really have a good crystal ball, odds are just as good that you would end up losing money if you buy in advance (and if you really are that good at speculation, you should be making so much money that you wouldn't care about saving a few bucks on your trip).

Unless you are either landing in Europe at some very obscure backcountry airport, or particularly unlucky, the airport you arrive at will have numerous functional ATMs all stocked up with plenty of Euros, and getting them there and then with your home ATM card will get you the best rate anywhere, period.

Bottom line: if you have leftover Euros from your last trip, bring them along so you have some pocket change when you land. As soon as you get off the plane, head for an ATM and grab a couple hundred Euro (at the best rate you're going to get anywhere on your trip), head into town and don't worry about it.

Really - ATMs are everywhere (including at the airports). They're easy to use. They're reliable. They give the best rates. Use the ATM when you land, and worry about other stuff.

Posted by
8126 posts

I think what you are proposing is buying several thousand dollars worth of euros now, for use in a couple of years. My personal opinion is that there is probably more risk than reward in doing so. The recent instability has shown that nearly anything can happen, we went from record bad exchange rates to somewhere moderate in a matter of months. International efforts to put safeguards in place to protect the financial markets will probably mean an effect on currency markets as well, just not sure to what effect, probably less fluctuation, maybe a move towards parity, who knows. But speculation aside, there are two things working against you, first is the time value of money. Basically stuffing that much money away and earning nothing, means it will have less value two years from now because you lost out on interest or the moneys use (maybe in the range of 5 to 10%?). Second, assumimg the alternative is using an ATM there during the trip, to buy Euros now, at a US bank, means a loss of maybe another 5% in exchange rates and fees. So in the end, to buy euros now is not a question of if the exchange rate will be higher than $1.40 (current IB rate) but will it be higher than the rate plus the 10 to 15% cost in getting euros now, pushing your breakeven to maybe $1.55 to $1.60, pretty close to the all time worst rates. In the end, I would not recommend it.

Posted by
12040 posts

Echoing the others, just to add emphasis: unless you get lucky, you can't win the currency speculation game. You'll always get the best exchange rate in Europe, and with ATMs everywhere (I had no trouble finding them in places like Chisinau, Pskov, Pristina, Skopje, etc), there is no good economical reason to buy foreign currency before you leave.

And here's a little secret- if your bank has an affiliation with the military, like USAA, Armed Forces Bank, Navy Federal Credit Union and others, you will not have to pay a conversion fee for ATM withdrawls in Europe.

Posted by
12040 posts

Good reference page, Henry, although I know for a fact that the information on USAA is incorrect, as they do not levy a service charge for currency conversion.

Posted by
485 posts

It's a good idea to have a few Euros (maybe 50 or so) on you when you land at the airport (as others have mentioned, for snacks, taxi, etc....) until you find an ATM or bank. If you are a AAA member you can purchase a small amount of Euros directly from your local office.

One suggestion (having just come back from Europe a week ago): if you're planning to use a debit card in Europe for ATM cash withdrawals, MAKE SURE you let your bank know that you will going overseas before you leave. Don't just assume that your debit card & pin number will work in Europe like it does in the U.S. I tried to withdraw cash in Germany and it wouldn't let me. After trying twice I decided to stop, lest the machine keep my card forever. However, when I used my card in a store as a credit purchase (rather than a debit purchase), I had no problem.

Posted by
12040 posts

D'oh! So as of 1 December, USAA now charges a currency conversion fee. Oh, well, it was nice while it lasted. Still, 1% is pretty low.