currency exchange: US dollars or ATM card?
 

I usually carry a few hundred dollars in greenbacks with me "just in case" my ATM card doesn't work (like the machines are down). In some countries, the exchange rate is poor with cash money, and in others it is good. Also, it is sometimes difficult to use an ATM at an airport because they're controlled by some non-bank "bank" that adds a nasty exchange fee. What about India and, in particular, exchanging US dollars to Rupees at the DEL airport?

Any particular ATMs I should look for in the country, and any I should avoid?

Thanks.

i don't think there is any particular atm you need to watch out for but they will all hit you with a pretty terrible exchange fee....

Hmmm. What about using US dollars to buy rupees? Is there a fee or poor exchange rate that way? And is it worse at the airport?

its not the best rate but will definitely be better than using the atms....

Interesting -- and odd.

So what's the best way for Americans to make purchases in India? Credit card (although I assume that's limited to high end merchants)? I'm assuming merchants don't want actual dollars (because they wouldn't be able to get rid of them). Is that an accurate assumption, or are dollars useful in India?

most shops will have credit card machines & some will even take dollars....there are a few money exchangers that will give you a decent rate....the one i use all the time is 'damini'....it is located in a popular shopping area called greater kailash 1....their number is +91 11 29231638....

Thanks.

That is odd, Keyser. I generally get pretty good exchange rate with atm's (within 1%). Cash exchange is probably better if you find the right exchangers, though (you might even get extra... people really like the $ :p). That said, it's still faster to get money from an ATM than an exchanger, and atms are pretty widely available in the cities, so it is pretty convenient that way.

As for credit cards.. they aren't accepted everywhere obviously and you have to deal with minimum purchases as well as merchant surcharge for using a CC in many places. So, carrying enough cash is the way the go, IMO. I prefer using atms since they are widespread and you can get just enough cash, whereas with exchangers, they may want you to exchange a bulk amount to get a good rate.

I always some 1000-2000INR from previous trips or exchange some exotic bills from other trips (CAD, CHF, GBP etc) at the airport with the forex agent there. The rest I pull from ATMs of major banks. CC are pretty much accepted universally (chip+signature cards don't work pretty much anywhere). The exchange rate at my recent withdrawals at HDFC and ICICI were within 1% of the interbank rate, no reason to complain there. I have a few cards that are fee free to draw cash abroad, so a pretty hamper camper.

Many ATMs will over you Dynamic Currency Conversion to your home currency at a terrible rate as an option to completing your transaction in INR.

You should always have an option to complete the transaction and be billed in INR instead. That billing will usually be within 1-2% of the interbank rate.

I often and widely use my US atm card in India. ATMs of SBI, Andhra Bank, PNB and other nationalized banks generally do not charge me any fee of their own (and if they do, they will notify you before the transaction is processed). My US bank does not charge me a fee. So they only fee I am hit with is a 1% fee charged by Mastercard/Visa.

Credit cards are accepted in India in more upscale places. I would say that most purchases you make that cost over Rs 500 will accept a credit card, especially Visa/MC. If you do not already have a no-exchange fee credit card, I suggest you apply for one right away. That way, you will only have to pay a 1% conversion fee. There are many good options, like the free one from Capital One (the 1% cash back rewards offsets the 1% conversion fee).

The ATMs of "nationalized banks" such as State Bank of XXX, Punjab National Bank, Indian Bank, etc generally will not charge you a fee.

ICICI bank, HDFC bank, ING, etc will generally charge you a fee.

I disagree

Agreed.

Honestly, I have never been offered dynamic currency conversion in India. But I agree that if you have a choice, always choose to be billed in INR.

I am a Citigold account with Citibank in the U.S., and don't pay any ATM fee using my Citibank debit card, at least in Brazil. I think ATM networks will basically be the same anywhere in a country. I've not encountered higher fees at an airport than elsewhere,though some people avoid ATMs at airports due to what they feel is a higher possibility of cloning/fraud.

while i have never had the need to use a foreign card in india, i do have a lot of clients who do & they all complain about getting terrible exchange rates when withdrawing from the atms....

Thanks for the discussion, guys. I've certainly picked us some good tips. I'll read the screens carefully on the ATMs to make sure I'm getting what I think I'm getting!

FWIW, I find it harder and harder to just pay 1% at ATMs when I travel. The golden age of easy ATM money seems to be over, as everybody is fee happy and trying to make a buck on the foreigner. At least the rebirth of the no-foreign-transaction-fee credit card makes the need for cash a little less.

A few thoughts...

If your bank charges you a per-transaction fee, be aware that most ATMs we used in India limited us to 10,000INR per withdrawal (less than US$200). So if you need to get a large amount of money, you'll have to do multiple transactions, and the fees will add up quickly.

Also, the ATMs will most likely only issue 500INR notes, which can be difficult to use for small transactions (though we did find some that offered the option to mix 500s and 100s). One problem we encountered in India is that NOBODY likes to give change. So if you need to buy something for 100INR, and you give them a 500, they will hem and haw and ask if you have anything smaller. Only when you threaten to walk away will they finally give in and give you change (or sometimes they will have to go to another shop to get change from them). It was weird. 500INR doesn't seem like a lot of money (less than US$10), but we had difficulty passing them in many places.

If you use a money exchanger, ask for a lot of 100s, 50s, and even 20s or 10s, as it will make purchases a lot easier if you have them.