When is the best time to exchange currency?

On Thu, 29 Dec 2011 18:27:05 +0000, David Horne, _the_ chancellor (*)
wrote:

I've posted this info before, but it never hurts to repeat it from time
to time. This is mostly for Americans and their ATM cards.

The first thing to be clear on is that there is probably no one at your
local bank/CU that understands how it works, so don't bother asking.

Some, most, ATM card issuers charge a fee for using any ATM not their
own. this applies whether withdrawing money in the same country or
withdrawing money in a foreign country. There are banks that don't make
this charge, especially on foreign withdrawals. I've heard of some users
asking their bank about the charge and being told it was by the foreign
bank, but if the charge is a nice round amount in American currency to,
say, an even quarter, that's BS.

Up until a decade or so ago, the only cost of using an ATM for foreign
currency was a 1% charge on the currently effective exchange rate by the
international system, save for that flat charge by your own bank.

I have never, ever, been charged anything by an ATM's bank in Europe, nor
in Mexico.

The bank gets the charge from the international system and, as far as I
can tell, there is no cost to your bank that's any different than the
cost of processing domestic withdrawals. The international system does
all the hard work of the exchange and your bank just gratuitously adds a
few percent because it can and because it's an easy way to get more
money. The same sort of thing banks everywhere are doing even more of.

Once the the bank's vigorish is added in, the total cost of foreign
exchange is maybe 2% to 4%. One reason they can get away with this is
because this is still cheaper than you can usually get at a For-Ex booth
or even a US bank.

Over-the-counter exchange has two costs that can be played with so that
the firm makes money. A flat fee may be charged,perhaps based on total
amount of the transaction, or the exchange rate can be played with, or
both. Many exchange booths list the price at which they will either buy
or sell certain foreign currency. If both are displayed, the real
exchange rate is about halfway between the two rates, which is handy to
know it you don't have the current rate at hand (when I travel I go to
oanda.com and print out a handy cheat sheet.)

In general, there is a roughly inverse relationship between the mount of
a fee and how much they try to screw you on the exchange rate.

As to traveling with some advance currency for the country I'm going to
obtained here in the US I have never had trouble finding an ATM at an
airport or international train station in Europe. If, for some reason,
ATM systems are down or none are available, any airport in Europe will
have a For-Ex booth and any fairly large train station also will. The For-
Ex booths don't screw you much worse than your won bank will, so, $100 US
notes seem to be universally accepted.

Not to mention that a surprising (for an American) number of transactions
can be made in Europe with a credit card, including the likes of taxis.

--
Dave Hatunen, Tucson, Baja Arizona

On Sun, 8 Jan 2012 00:19:28 +0000 (UTC), David Hatunen wrote:

The first thing to be clear on is that there is probably no one at your
local bank/CU that understands how it works, so don't bother asking.

Agreed.

Some, most, ATM card issuers charge a fee for using any ATM not their
own. this applies whether withdrawing money in the same country or
withdrawing money in a foreign country. There are banks that don't make
this charge, especially on foreign withdrawals....

The most notable being Capital One, which is the sole reason I have their card.

Many exchange booths list the price at which they will either buy
or sell certain foreign currency. ...

There are Web sites that show the actual current commercial rates. When you're
in another country, you can check the current rate, and then shop the local
money exchanges as well as ATMs.

In general, there is a roughly inverse relationship between the mount of
a fee and how much they try to screw you on the exchange rate.

Agreed.

As to traveling with some advance currency for the country I'm going to
obtained here in the US I have never had trouble finding an ATM at an
airport or international train station in Europe....

True, but when I come home, I always keep the last hundred to two hundred of
each foreign currency in cash as my own fund for my next overseas (or Canadian)
trip.

.... $100 US notes seem to be universally accepted.

I still find that a lot of places -- and machines -- will not accept US $100
notes. OTOH, I've never had a $50 note refused.

Not to mention that a surprising (for an American) number of transactions
can be made in Europe with a credit card, including the likes of taxis.

True. More and more US cities cabs are accepting credit cards -- but sometimes
with an exorbitant fee attached. Always ask for details.

-- Larry

On Sun, 08 Jan 2012 19:50:22 -0500, wrote:

On Sun, 8 Jan 2012 00:19:28 +0000 (UTC), David Hatunen wrote:

The first thing to be clear on is that there is probably no one at your
local bank/CU that understands how it works, so don't bother asking.

Agreed.

Some, most, ATM card issuers charge a fee for using any ATM not their
own. this applies whether withdrawing money in the same country or
withdrawing money in a foreign country. There are banks that don't make
this charge, especially on foreign withdrawals....

The most notable being Capital One, which is the sole reason I have their card.



I also have a Capitol One card, and like you, exactly for that reason.

--
Ken Blake