The best way to exchange currency
Traveling to Europe this summer? Don't overpay for converting your dollars into euros when you arrive or before you depart.
A new study by Card Hub illustrates how much you'll pay to convert dollars to euros at a variety of locations. "Exchanging currency tends to be an important pre-trip task for international travelers, but as this study illustrates, doing so is not only unnecessary, but it will also cost you quite a bit of money," Card Hub's Odysseas Papadimitriou said in a press release.
Among the findings:
- Make purchases with your credit card. On June 11, the exchange rates were 1.2557 for MasterCard and 1.2579 for Visa. That means a euro was worth about $1.25, much lower than last year's $1.42. Avoid paying up to 3% on each purchase by taking a card that doesn't have a foreign transaction fee. (Post continues below.)
- Avoid the banks before you go. Among the 15 largest U.S. banks, the exchange rates ranged from 1.3000 at Citibank to 1.4400 at U.S. Bank. The transaction fee ranged from zero to $12 for bank customers. (For noncustomers, a higher fee might apply.) Card Hub adds:
The banks that offer the best deals are Northern Trust and Harris Bank, which charge 1.3153 and 1.3207, respectively, and do not apply fees to the transaction The banks offering the worst rates are U.S. Bank, which has a 1.440 conversion rate and a $9.95 fee, and Cincinnati, Ohio-based Fifth Third Bank, which has a 1.3600 conversion rate and a $10 fee.
- Beware the airport kiosks. Card Hub says the largest airport-based money exchange service, Travelex, had a June 11 rate of 1.4493 and a $9.95 fee.
"On average, credit cards save consumers 8.1% relative to bank conversion services and 16.2% relative to companies found in airports," Card Hub said.
What should a smart traveler do? Card Hub offers these tips:
- Use your debit card to withdraw cash at ATMs after you reach your destination. Hopefully your card has a low foreign transaction fee. "You'd rather get the low Visa/MasterCard exchange rate and withdraw cash as needed than have to trade in dollars at an unfavorable rate and risk getting pickpocketed while carrying more cash than you need," Papadimitriou said.
- Let the issuers of your credit and debit cards know about your travel plans before you leave home. You don't want your card suspended for suspicious activity.
- Write down the phone number on the back of each card that you can call collect if your card disappears during your travels. Keep them separate from your cards.
- Avoid "dynamic currency conversion," when a foreign merchant offers to convert the purchase from his currency into yours. It's a ripoff.
More on MSN Money:
· American Express Platinum and Centurion: 0 percent
· Capital One: 0 percent
· Discover: 0 percent
· HSBC Premier: 0 percent
· JP Morgan Chase: 0 percent to 3 percent, depending on a card
· American Express: 2.7 percent
· Bank of America: 3 percent
· Citibank/Diners: 3 percent
· Diners Club: 3 percent
· HSBC: 3 percent
· US Bank: 3 percentWells Fargo: 3 percent
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