Currency conversion question.
 

I know currency conversion rates vary quite a bit depending on where you change your money.

If one was going to London from the US, would it be better to change dollar to pounds in the US before leaving or in London?

I'd recommend having a few bob in my pocket before arriving, just in case. But for the bulk of my cash needs, I would head for a bank ATM with my ATM card, and withdraw Pounds that way. I always seem to get by far the best exchange rate in this way. You may want to check with your bank to see if they charge any "conversion" fees.

[This message has been edited by PremEx (edited 02-16-2000).]

the key in the last post is ATM - many banks dont charge conversion fees on ATM / Debit card transactions but do for credit card charges. The best deal around is one of the stock brokerage (Schwab, AMEX, Merill Lynch, etc) cash management debit cards - a lot of these even rebate your ATM fees!

As always PremEx has the answer. ATM upon arrival.

Premex is spot on. But as a general point, you seem to get better rates in your own country (home currency) than your destination country (foreign currency).

I just returned from Belgium and am comparing the "cost" of charging and getting money from an ATM. Indeed the best rate was from the ATM - the best using my citibank ATM at a citibank office - but the small difference might be more related to getting the money 2 days later and a slightly differenct exchange rate. Interestly my Citibank Click card had a worse exchange rate than my regular citibank visa and mc. I am having them look into it to see if this is a mistake or it might be a regular occurrence. If so, I will not be reserving my next international hotel with the click card.

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DtG

How about when you consider the Chase currency-to-go offer? Isn't that free of conversion fees? And if you change $500 or more the delivery is free.

Actually no, I don't believe it is free of these fees- and I wouldn't count on them for making good on a delivery in a "tight squeeze!"

As others have commented, Chase CTG make sup for the ocnvenience with terrible conversion rates.

For example for 2/25/00, the Interbank rate is $1 USD = $6.7377 FRF. At CTG, $1 USD. = $ 6.4103 FRF. So converting $1000 USD will "cost" you $327 Francs or about $50 USD!

I agree with the ATM on arrival. My bank charges true interbank rates against my ATM card (an ATM only VisaPlus card). The rates are so good, that for some purchases I've started going back to using cash.

Now this sometimes shocks salesmen, especially in Asia, where they often will add a surcharge (eg 3%) if you wish to buy goods using a credit card. Last week I purchased a item that cost USD 400 and the salesman thought he was doing me a favour when he announced that he would accept a credit card and not add a surcharge. He was shocked when I declined his offer and handed over cash instead. The savings to me, by not using one of my credit cards (which charge interbank rates + 2 %): around USD 8. Not all that much but it all adds up.

Austman gives good advice. I have done this for years, but I must use a debit card to avoid charges. What USA bank issues credit cards that act the same way?

[This message has been edited by MisterNice (edited 02-26-2000).]

I have a VISA card that my credit union issues that charges no fee for cash advance.

I use it all the time to get foreign currency on the road. It is more widely accepted than the ATM from my bank.

Another option is Amex.

If you are going someplace for a stay of more than a couple of days, this makes sense.

If you are Amex gold or platinum, they will let you charge foreign currency (to a credit card, not Amex) the amount you need and will send it without shipping costs. They can do it overnight for about $10 US. Exchange rates (no fixed commission) were very good.

I've used ATM's all over the world. At first I would also get $500 in no-commission Traveler's Checks (from AAA), but after redepositing these at the end of each trip I've stopped even that failsafe.

As for which ATM card to use, a lot of the Internet banks offer no charge for ATM withdrawals at other brick-and-mortar banks, as well as they'll reimburse you if the other bank levies a charge. Since my "regular" bank charges $3.50 for each foreign ATM transaction, this seems the way to go. Just pick a bank that has a mileage tie-in you like (E*Trade now offers Delta; CitiFi offers AA) and you can get miles to boot!

Are you saying that if you withdraw cash from an ATM with the citi/fi card, they will treat it as something eligible for mileage? Please explain. My regular citibank card doesn't charge fees for using non citibank ATM's and I did get the best rate in Brussels compared to using my credit cards. I brought all my Travelers Checks home because it wasn't worth it both with the conversion rate and the changing fees. Chase's rate is terrible but I did order the least amount (500 BEF)in order to get them to put the US TC's through as my "4th" order.

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DtG