We're planning a vacation to England and one of the things we'll need is cash.
In previous visits, we've relied on the partnership between Bank of America and Barclays. I could use a Barclays ATM to withdraw British Pounds without paying a fee while getting the most up to date currency conversion rate possible. More recently, Bank of America started including a 3% international transaction fee. That makes my previous strategy less appealing.
So what's the best way to exchange dollars into another currency, like the British pound?
All rates quoted were from March 30th, 2017 – use them as a way to compare relative rates. They are no longer current.
Use a no foreign transaction fee credit card
The most efficient way is to use a credit card that doesn't charge you a foreign transaction fee.
Visa and MasterCard are the most widely accepted. American Express works at major retailers but rarer at smaller merchant. No one has heard of Discover. 🙂
In my case, I'll be relying on the Chase Southwest Rapid Rewards Card, which is a Signature Visa card and has no foreign transaction fee. You can always check the rates that Visa uses for exchanges.
The rate was $1.247675 USD per British Pound — better than Google's listing of $1.25! (there may have been rounding involved though)
This is great! Except we're going to need cash sometimes.
Order it from your bank
How much of a premium will you pay? It depends on your bank and the currency.
Here's the pricing from Bank of America:
The exchange rate according to Google for each shown currency is:
- Great Britain: 1.25 USD per British Pound
- European Union: 1.07 USD per Mexican Peso
- Mexico: 0.054 USD per Mexican Peso
- Canada: 0.75 USD per Canadian Dollar
It appears the premium is about 4-6% but Bank of America will even mail it to you.
Rates will vary, Wells Fargo will only charge you $1.3058 USD per GBP. Cheaper than bank of America, but slightly more than the going rate.
Use local atm with partnership
In my case, Bank of America has partnered with a lot of banks so you can withdraw money without the $5 ATM fee (though you still pay a 3% international transaction fee):
- Barclays United Kingdom (England, Scotland, Wales, Northern Ireland, Jersey, Guernsey and the Channel Islands)
- ABSA (South Africa)
- BNP Paribas (France)
- BNL D'Italia (Italy)
- Deutsche Bank (Germany and Spain)
- UkrSibbank (Ukraine)
- TEB (Turkey)
- Scotiabank (Canada, Mexico, Peru, Chile, and the Caribbean countries: Anguilla, Antigua & Barbuda, The Bahamas, Barbados, British Virgin Islands, Cayman Islands, Dominica, Dominican Republic, Grenada, Jamaica, St. Maarten, Puerto Rico, Saint Kitts & Nevis, Saint Lucia, St. Vincent & The Grenadines, Trinidad & Tobago, Turks & Caicos Islands, and US Virgin Islands)
- Westpac Bank (Australia and New Zealand)
- China Construction Bank (Mainland China, excluding Hong Kong)
Check with your bank to see their list of partners in the country you're traveling to.
You get decent rates for it, plus convenience, but be very aware of any fees.
At the Airport
The worst possible way because the exchange rates are the worst. But if you find yourself in a jam and need a little cash, it's not completely unreasonable to turn to one of these.
Travelex is a popular airport currency exchanger. If your airport has international flights, chances are it'll have of these guys too.
When I checked online, their current rate was 1.367 USD per British pound. Far worse than any others on the list… but if you're in a jam, it's not horrible.
We will probably rely on a mixture of using a credit card and ATM withdrawals. Bank of America tacks on a 3% international fee but you get the current market interbank rate, which is better than the rate for shipping money to you.
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Ms. Frugal Asian Finance says
If I travel for work, I’ll ask our country office to do the exchange for me. If I go home in Asia, I’ll ask my family. If I travel for fun, I’ll get the currency at the bank.
Thanks for the tips!
Kyle Burbank says
Interesting that BofA was more than Wells Fargo for GBP — the opposite was the case the last two times I’ve looked for other types of currency. Good to know that it might actually differ not only by bank but by the type of currency you’re looking for.
I’ve also had great success with smaller foreign currency vendors that tend to offer much better rates. Unfortunately, this was back in LA and not every city is as lucky :-/ Great piece, Jim!
Jim Wang says
I think it also depends on when they update their rates. They’ll be so close that it’s not uncommon for them to flip based on timing.
When I traveled to Guatemala earlier this year I exchanged money ahead of time through Bank of America as you mentioned above. I had it delivered to my local branch and they notified me when it was ready for pickup. The exchange rate was not the best but it worked out well since our tour guide was going to take us to a local ATM when we arrived but then he decided not to because it was a Friday before a big holiday and he said there would be big lines at the bank.
I used a credit card with no foreign transaction fees when I could (Bank of America Travel Rewards card).
And then I used a USAA ATM card when I needed more cash. USAA does not charge an extra fee for foreign withdrawals and will refund any ATM fees up to a certain amount per month (I think $15?). I don’t think you need to be a member of the military to open a USAA bank account, though I am not totally sure on that.
USAA only refunds up to $15 a month in ATM fees if the ATM is in the United States. Also, you have to be a military member or family of a military member to open a USAA account.
Matt Miller says
The Chase Southwest Card is great! I use it for all my purchases and then pay that puppy off each month. I haven’t used it abroad yet but it sounds like a good plan if you don’t need physical cash. I used USD in many foreign countries and the people often accepted it. Funny thing is though that a lot of the merchants wanted newer bills and they seemed to value large denominations over small. Enjoy England!
About 20 years ago, I arrived in Brussels and planned to immediately get cash from the ATM. Unfortunately, the security guards that accompany the ATM maintenance people were on strike! My hotel was able to cash a check for me or I really would have been screwed! Luckily, we can use credit cards virtually every where now so cash isn’t as critical.
Mark & Lyndon says
We use BoA, and their association with Merrill Lynch made it so that we had enough in the bank and ML that BoA didn’t charge us to use an ATM (anywhere) while we were in Austria, Italy, Hungary and Czech Republic. We are at the Platinum Honors tier due to the ML account and the BoA checking/savings accounts (combined). When we called them to ask about the charges we could expect we were told that we’d be offered FREE transactions for our entire trip and that is exactly what we got every time we drew money out of any ATM. We were only charged the going exchange rate for ATM’s which is better anyway.
Transferwise all the way!
Free mastercard, no fee exchange rate, once you use it you’ll leave behind banks and their ilk