Buying foreign currency at home and abroad


Buying foreign currency at home and abroad

It is always good to take some foreign cash with you when you are travelling, in addition to your credit/debit cards, as, let’s face it, anything can happen; your card could be lost or stolen, or just does not work, there may not be an ATM around when you need it, the taxi drivers may only take cash, etc, etc.

Years ago, whenever we were travelling abroad one of the main things that needed to be organised in advance was the purchase of ‘travel money’: this usually meant buying travellers cheques or currency such as Deutschmarks or US Dollars (either of which were convertible pretty much anywhere we travelled) or changing money at exchange bureaus at our departure or arrival airports.

Today, however, there are many different ways to organise our travel money, and many of us simply rely on drawing out cash from our destination’s local ATMs as and when we need it.  Of course, this is by far the simplest and quickest way to get hold of the local currency, but of course there is a cost involved, as there is with pretty much every other way of changing money.   Here are the options:

  • Buying currency at your own bank before you leave; banks, just like everyone else, are in the business of making a profit, and they will always buy currency at a very different rate to that at which they will sell it; so whilst you might look up the exchange rate on the internet or elsewhere on the day that you go to change your money, you will find that the rate that you actually get when buying your Euros, Pounds or other currency from a bank will be very different to that published by your national bank. You should also note that most banks, irrespective of the country, keep to fairly limited opening hours and are closed on weekends and public holidays, plus very few of them will hold many of the “exotic” currencies requested nowadays in stock, so this may need booking well in advance.
  • Buying currency at any bank at your destination: the same applies, although the exchange rate is likely to be even worse than at home, especially if you are selling a currency that the bank doesn’t have a big demand for (for example, a bank in Spain may have very little need for your Czech crowns or Polish zloty, so will give a very low rate of exchange when you use them to buy Euros from them (which are in constant demand). And, in some countries banks may not even trade with you if you do not have an account with them.
  • ATM machines at your destination: these will often show you the exchange rate that you will get if buying local currency using your home country’s credit card and there may be a choice between agreeing the conversion by the local bank or having the amount converted by your own; generally the rate will be better if you allow it to be converted by your own bank, but it will still be a lot different to the published rate of your national bank.
  • Buying your foreign currency at an exchange bureau such as Interchange; as with banks, you will get a different rate to that which is published by your national bank, and it is better to buy before you depart than upon arrival at your destination airport. In fact, in several countries Interchange offers some of the very best rates for buying your currency if you book it online and collect it at the respective exchange bureau (this service is not available in all countries, but it is worth checking your local website before you do anything in relation to buying your travel cash). Unlike banks, foreign exchange companies are usually open daily and with long opening hours and a wide scope of currencies.
  • Buying your foreign currency at an exchange bureau at the arrival airport: this is likely to be a much worse rate of exchange than if you change it at the departure airport office (for similar reasons to the above – the bureau at your arrival airport may not particularly want your local currency so will sell you much less of theirs than if you change your money at home). However, in the case of some of the “exotic” currencies, you may not be able to buy these in your home country, as they are simply not available.
  • Buying your currency at the hotel: many hotels offer currency exchange as one of their services, but the rate is likely to be very poor (it is a bit like buying your drink from the minibar – the cost is usually enormously higher than if you buy the same bottle in the local shop, but you are paying, mainly, for the convenience). Of course, if you turn up in the middle of the night and you don’t have local cash to pay your taxi, for example, you will welcome the ability to exchange money at the hotel reception, irrespective of the exchange rate.
  • Cash-back and/or buying in shops but paying with your own local currency: some international shops offer you the service of buying in your local currency, or paying more than the goods that you are purchasing and receiving the cash back in the currency of the country that you are visiting. This is usually offered only if your local currency is a major one, eg. Euros or Dollars, and this is likely to be the worst exchange rate that you can find, purely due to the fact that the shop is offering you a service that is a benefit and convenience to you. For them, unless you are buying something very expensive, it is almost more trouble than it is worth and they are only going to offer it if there is some profit on the spread rate.
  • On the street money changers – several countries, particularly those from the former Eastern Bloc, suffer from the ‘on the street money changers’ that are often working around the main tourist areas, but the risk with changing money in this way is huge – it can be counterfeit, old money that is no longer in circulation, plain paper with a few notes on the top or simply an offer to change money whilst districting you in order to pick your pocket! Make this choice at your peril!

We hope that this guide is useful to you and will be happy to hear about your own experiences with changing money abroad!