Currency exchange in airports — how to avoid huge fees


Airport currency exchange services are convenient — but they’re usually one of the most expensive places to buy your foreign currency. You’ll often find that there are poor exchange rates, and high fees - either upfront, or hidden in the exchange rates on offer. The good news is that airport currency exchange services aren’t your only option.
If you need foreign currency for an upcoming trip or vacation, we have all the advice and ideas you need to avoid unfair fees and get the best possible deal on your exchange.

Read on for more — our handy guide covers the following:

  • How and where to exchange your currency before traveling
  • Where to find local currency once you arrive
  • How to avoid high fees when using a credit, debit or prepaid card abroad
  • What to do about left over currency after your trip

Exchange currency before your trip

If you want to get your travel money before you head off on vacation, you have a few different options. The deals on offer will be different, depending on which service you choose, so it’s worth comparing a few before you decide.

Exchange currency at your regular bank or credit union

Many banks and credit unions offer currency services for their customers, although you’ll need to check your own bank’s processes to make sure it’s convenient for you. If you have a Bank of America checking account, you can order foreign currency online for collection or delivery, for example, but if you have a Bank of America credit card only, you’ll need to visit a financial centre to place your order¹. Wells Fargo customers, on the other hand, can order currency online, on the phone, or in person, and have it delivered to their registered home address or a nearby branch for collection².

Use a specialist foreign exchange service

Another option is to get your currency through a specialist foreign exchange service, such as Travelex. These services have handy online options, so you can place your order from home, and have it delivered to you³. You’ll need to have someone available to sign for the delivery⁴, and with Travelex there’s a service fee to pay for orders under $1,000. Alternatively, you can collect your currency from one of over 100 Travelex locations in the US.

If you’re considering using a foreign exchange service or your bank for currency exchange, don’t forget to check the fees and charges, including any exchange rate markup added — we’ll talk about that again, a bit later and explain how to compare rates and what to look out for.

Get your travel money at the airport

If you didn’t get your foreign currency beforehand, you do have the option of getting your currency at the airport. This is convenient — but can prove an expensive option. Airport currency exchange kiosks serve a captive market, so there is no real competition. This can lead to poor exchange rates, which drives up the costs of currency exchange, and leaves you with less to spend on your vacation.

Get a borderless multi-currency account from Wise

If you travel frequently or for a longer time, you might be even better off if you open a borderless account from Wise. You can hold your money in any of dozens of different currencies, and use your linked debit card to make purchases and take local cash out of ATMs. Just top up your account from your US bank account for simple spending as you travel. There’s no fees for opening or maintaining an account, so it doesn’t cost you anything to try it out.
You’ll also get the mid-market rate on all your currency conversions.
Why is that important?
Well, usually banks and money exchange services add a markup on the mid-market rate, that they buy the currency at and then sell it to you. So you’ll pay that markup as another fee, essentially. But this approach means people often end up not understanding how much they are actually paying in fees for their currency.
So how to understand the costs?
Compare rates using an online currency converter or checking the rate on Google. That is quite an easy way to see, where the best exchange rates are at.
You’ll also want to be checking how much foreign currency you get for the same amount of dollars at different providers. The more you get, the better the deal.

Get foreign currency at your destination

If you don’t exchange your money before you travel, there’s no need to worry. You can get your foreign currency once you arrive at your destination fairly easily.

Withdraw local cash from an ATM

Before you head off, it’s worth asking your regular bank if they have a partner institution wherever you’re headed, or if they’re a member of a network like the Global ATM Network. These networks are handy because banks often work together to offer their customers fee free ATM withdrawals as they travel, which can make taking local cash from an ATM a relatively cheap way of exchanging your funds. If your bank isn’t in a network like this, you’ll need to check the international withdrawal fees you’ll be charged, to make sure you think they’re fair.

One thing you’ll need to watch out for, if you’re using your credit or debit card abroad, is dynamic currency conversion — DCC. DCC is where you’re asked if you’d like to pay for your purchase or withdrawal in your home currency instead of the local currency. Paying in dollars can be tempting because it saves you having to work out the costs in an unfamiliar currency. However, it’s an expensive choice, as the exchange rate you’re given won’t be the best available. It’s far better to choose to pay in the local currency, so your own bank do the currency conversion for you.

Send money to a friend or family member in your destination

If you’re traveling to visit a friend or family member, who has a local bank account, you could also consider sending them some money from your US account, and then withdraw it at fee free ATMs once you arrive. This beats the international cash withdrawal fees many banks charge, and can mean you get the best exchange rates out there.

Use a service like Wise to send money, and you’ll get the mid-market exchange rate, with just a small upfront fee to pay. The mid-market exchange rate is the one that banks use to trade currency on global markets. However, this rate is seldom offered to retail customers, as most banks and exchange services add a markup to the exchange rate they pass to their clients, which they keep as their profit. Using a provider like Wise can save you money, and mean you have more to spend during your travels.

Different types of cards

Using a credit, debit, or specialist travel money card can be a convenient option to pay for things during your vacation. Typically, you’ll get a fair exchange rate when using your credit or debit card, as long as you avoid the unfair charges associated with DCC, which we talked about earlier, and you don’t need to worry about carrying around a lot of cash. It’s worth checking the costs of ATM withdrawals while you’re abroad, however, as these can be charged by both your home bank, and the ATM operator, and can stack up quickly.

If you’re using a credit card when you’re travelling, it is especially important to understand the fees you’ll need to pay. Some credit cards charge more for cash withdrawals, for example, or may start to charge interest right away, which can increase the overall cost of your trip.

Travel money cards are becoming more popular with travelers, because they offer convenience, and can be a safe way to carry money with you when you’re away from home. You preload money onto the card in whichever currency you need, and you can then use it in the same way as you might a debit card, to pay for things and withdraw cash from ATMs while you’re abroad. Each travel money card has a different set of fees and charges, which you’ll need to understand - there are costs for cash withdrawals for some cards, for example, which can eat into your travel money.

Currency exchange after trip

If you find you have foreign currency left over after your trip as cash, you may be able to sell it back to your bank or specialist currency exchange service, and get dollars in exchange. Typically, foreign coins and smaller denomination notes won’t be exchanged, and there is usually a fee to pay, either upfront, or as a markup on the exchange rate.

The exchange rate for switching foreign currency back to dollars is not usually as good as the rate offered when you were sold the foreign currency in the first place, which means you lose out. If it’s possible, it’s far better to exchange only what you need, so you don’t have to pay currency exchange fees twice.

Sorting out your foreign currency isn’t the most exciting part of planning a trip abroad. However, finding a good value currency exchange service can make a real difference to how much you have in your pocket to spend while you travel. Do a bit of research to make sure you get a good deal — and then all you need to do is kick back and enjoy your trip.


All sources checked 17 December 2018


*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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