Exchanging Dollars for GB Pounds

I answered this on the General Europe board.

I get money from my local credit union and take it with me. I then put the remainder in my checking account and withdraw as needed from an ATM. Cheapest way to get cash overseas. Be sure to tell your bank you are traveling and when and increase your withdrawl limit because you will be withdrawing pounds instead of dollars and 200 pounds is over 320.00, so you can get to your normal limit very fast.

Don't exchange your money anywhere. Buy a few £'s before you go to get you started and use ATM's once you are there.

Agree with Laurel. We went to Ireland in May. I started tracking the Euro last Sept and bought Euros from my travel agent (there was no fee since I had booked with them) when it took a drop. Since you don't have a lot of time to track the pound, at least get some pounds before you leave and use ATM when you get there. BTW--the pound took another drop today and is at its lowest since April.

Laurel gave you good information. Completely agree with her.

But the euro, which I'll need for the end of my trip, has jumped way up and offsets my savings on pounds. I think they figure out when we're coming, and the exchange rate just shoots up. Recently I did the math for the last two trips, and I found I saved 7-8 cents on each currency unit on that trip by using ATMs. Even with the $5 per ATM withdrawal on that trip it still cost less than the 3% plus currency conversion fees I paid on the earlier trip where I mostly used my credit card. We're going to London in just over a month, and I'm having a hard time convincing myself to buy any starter pounds here because I know my bank will charge way more than I'll pay there, and it irks me!

"the $5 per ATM withdrawal " - you need a different bank. I have an account with Capital One (bank, not credit card) and pay no fees for ATM use. Plus my Credit Union gives me five free accesses/month and only charges $1 for those over five.

Thanks, Kathy, you're right. I checked out Capital One and rechecked Ally and a local credit union. Capital One has no conversion fees while Ally says it has a 1% fee, so CO wins hands down. I'm going to open an account with them for travel at least. I also checked out your pre-trip and packing list blog, and at my age it's time to put mine in writing, too!

Dellinda, be careful about your timing if you are opening a new Capital One account for a trip this summer. It has been reported here that they don't release deposited funds for the first 30 days after you start an account. A regular poster here said that they were unable to use their card in Europe because they had only opened their account a week or two prior to their trip. There is no such restriction at Ally.

London is one place where a few select exchange bureaus beat most US ATM card withdrawals. http://www.bestforeignexchange.com/index.php, with two handy locations currently quotes a markup of 1% over the interbank rate quoted at http://www.oanda.com/ .

I think the convenience and safety of using an ATM/debit card in the UK beats every other alternative. Just be sure the card issuer knows when you'll be there (so they don't flag your first use as fraud and freeze the account). Bump up the limit for the duration (substantially... you never know). Know that you almost certainly won't be able to access money in a U.S. savings account, so transfer funds to a checking account. I buy $200 in pounds at my departure airport. I don't worry about the extra dollar or two in cost. But, if my flight is late and shows up at Heathrow at 2am, long after the Tube has shut down, I want enough money in hand to be able to pay for a taxi into London. And to get me started the next day. Yes, you can exchange money at Heathrow or use the ATM's, but I can't be bothered after a long day.

$200 worth of foreign currency from a US airport exchange bureau will cost you more than a dollar or two. I figure $200 will get you less than $169 worth of foreign currency if using Travelex with their 13% markup and $10 fee. The worst ATM cards charge 3% plus $5 and give you about $189 worth of foreign currency for $200.

Whatever the cost, Chip, it's worth it to me. The only place I can directly and immediately exchange dollars for pounds is the TravelEx window at the airport. I know I'd get a better deal at ATM's on the other side. But it is worth it to me for the ease and convenience, especially weighed against the thousands of dollars a UK trip costs. Opinions may vary, of course, and they are all as good as mine.

No interest to you, j.c., but if other readers of this thread can scrape together $200 a few days before departure to allow for shipping, they can get $182 worth of foreign currency from Bank of America or $179 worth from Wachovia (Wells Fargo). I hate to see anyone else using Travelex in US airports. Note that some ATM cards provide $198 to $200 worth of foreign currency for $200, a gain of about 6 pints of ale over Travelex.

Also heading to London. I was frustrated after last two trips to Europe at my credit card "exchange fee." Putting aside the ATM fees - anyone know a credit card that waives the fees on ATMs and Credit Cards? I thought we got an offer for AmEx? Thanks.

As reported on numerous threads here and elsewhere, Capital One. Also, Schwab if you have an account with them. One or two affinity cards have recently announced no-conversion-fee cards, but since I'm a satisfied Cap One customer I didn't commit them to memory.

Chip, I'm a BofA customer, and check their rates and delivery fees before I travel. Probably just a random coincidence, but so far they haven't been cheap enough for me to worry about the difference. In general, I'm a big proponent of the notion that travelers are wise to spend a few extra bucks for convenience and ease of mind.

Marie, I would not recommend trying to use an AmEx (or Discover) card in Europe. They are not widely accepted. Stick to Visa or Mastercard. Credit unions also usually have very little or no fees for withdrawals.

j.c. I can see that you are happy to pay extra for Travelex. In the future you should make it clear that $170 worth of foreign currency costs you about $30, instead of a dollar or two.

Believe it or not the money changer at covent garden has great rates as does Harrod's . I was told by an excutive at Harrods rich people pay anything for goods but wont pay an extra penny in exchange rates.

Chip, it's been a few weeks, but tonight BofA is selling 200GBP online for $338.74, and Travelex is selling 200GBP online for $341.82. Don't know what the rate is at the airport. Don't know what my BofA branch charges to get 200GBP sent to them. I'll sweat hotel and airfare costs, but I'm reluctant to inconvenience myself to save a tiny fraction of the overall trip costs. That's my preference, and we're all different.

j.c. - I'm also a BofA customer, and the rate they're currently offering looks close to the current exchange rate plus their 4% foreign transaction fee that you would be charged anyway for getting your money at an ATM in Great Britain. They will also charge you $7.50 to have GBP delivered to your local branch for pick-up. The one plus is no additional ATM fees if you use a Barclays ATM. BTW, I just had a friend buy some GBP from AAA, and her rate was even higher than Travelex!!

j.c. The walk up cost for £200 at Travelex tonight is $377.12, a 17.1% markup over the interbank cost of $322.02. Add in the $9.99 Travelex airport pickup fee to your quote of $341.82 and the markup is 9.2%. With no leftover pounds on hand, I will rely solely on ATM's for foreign currency on my next trip to the UK

If I had a bank that had a 4% transaction/exchange fee, I would have changed banks long ago. I have a credit union that has a 1% mark up with no ATM fees. However, if you are only going to go out of the US one time, it may not make sense to change banks.

'4% foreign transaction fee that you would be charged anyway for getting your money at an ATM' I must be missing something - - I thought FTFs only applied to credit cards. At least that's been my experience and it sure isn't any four percent -- maybe two percent on one and one percent on the other. These darn money questions seem a bit anal, anyway. If you go for a month and spend ten grand (not me, but apparently some peope do) and split it evenly between a credit card at two percent and an atm at one percent - - that's a hundred bucks to use the credit card and fifty for the atm withdrawels - - five bucks a day, which is less than my coffee allowance. The buy-early questions and discussions just leave me shaking my head. I generally have a little bit of starter currency on arrival, but if I don't it sure isn't a problem that can't be solved in less than five minutes - - much less time than it took me to read this thread.

So sorry (and very red-faced), I misspoke when I said BofA charges a 4% foreign transaction fee for getting your money at an ATM. It is 1%, plus an ATM fee if you're using an ATM that is not in their Global Alliance Network. The 4% is for purchases made using one of their issued VISA cards, which is why I use one issued by a credit union that has no foreign fees at all.

I'm with Ed on this. I don't get going out of my way to save a few dollars on a trip that costs thousands. I want to enjoy myself, not burden myself with tracking down the absolute best deal. I like to show up with enough GBP in my wallet to get me to my hotel and on the street the next morning in the event of the Worst Possible Scenario happening. Paying high TravelEx fees at the airport is worth it compared to waiting around for my local branch to get something less than 100 quid shipped to them. I have better things to do than deal with people who haven't seen a GBP. After I arrive, I use an ATM card to grab 200-300 pounds every so often. Works fine. I try to use Barclays because of their deal with BofA, but I don't sweat it. ATM and exchange fees are peanuts.