Should you use currency conversion at the airport?

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You’ve just walked off the airplane after a 12-hour flight, and you cannot wait to pick up your bags and get as far away from the airport as possible. After all, you’re about to start your vacation!

There’s just one thing you need to take care of — exchanging some of your money into the local currency. You remember reading somewhere that using currency conversion at the airport is a terrible deal, but at this point, maybe you shouldn’t worry about it.

This is a scenario to which many of us can relate. But just how bad is the exchange rate when you convert currency at the airport? And what other options do you have?

Airport exchange rate compared to other alternatives

The good news is, there are a lot of alternatives that are better than carrying around a large sum of cash while you travel or paying hefty currency exchange rates, including:

  • Exchange currency at your local bank before your trip – One of the best ways to manage your money is to prepare in advance. Determine how much cash you might need for your trip and visit the local branch of your bank. They will typically have common foreign currency on hand, and the fees you’ll pay will be much less than those charged by airport currency exchange outfits.
  • Use your debit card to access cash from the airport ATM – A no brainer, right!? Find an ATM at the airport and withdraw cash this way. You’ll receive the bank’s exchange rate instead of the airport’s extra fees.
  • Use your credit card as much as possible – In addition to earning points for the money that you spend on your international vacation, many travel credit cards offer the benefit of no foreign transaction fees. That’s a double win for you. 

Pro tip: To avoid paying currency exchange fees on your way home, consider if you will be back in this country in the near future. It might be worth holding on to that cash for your next trip. Or, check with friends and family to see if they’d like to purchase it from you for their upcoming travels.

Airport currency exchange

The rumors are true, exchanging cash at the airport is expensive. In fact, an MMS team member once paid nearly 27% more for their money to exchange currency at a Travelex booth at the airport. 

You might be wondering: Why, exactly, is it so expensive? 

To start, the exchange rate at the airport currency exchange kiosks is significantly lower than you’d get by simply pulling money out of the ATM in a different county.

For example, you might see an exchange rate as low as 65% when converting USD to Euros. Considering that the current exchange rate for the Euro is around 85%, that is a huge difference. If you’re converting $100 to Euros, for example, you’ll only get 65 Euros from the currency exchange kiosk, whereas you’d get 85 Euros from an ATM. 

On top of these crazy exchange rates, there is typically a service fee added when you exchange money at an airport kiosk. Let’s assume that you’re exchanging $100 with a rate of 65% and a $10 service fee. You would walk away with just 55 Euros. That is a lot of money lost for simply exchanging cash at the airport. 

The fact of the matter is, a terrible conversion rate can impact your budget for your trip before you even leave the airport. 

Best way to manage currency exchange when you land

Let’s say you’re reading this article mid-flight, thinking to yourself, “Agh! If I’d only known about my other options ahead of time!” Don’t worry, let’s work with what we have.

If you haven’t exchanged currency ahead of your trip, no problem. The goal here is to come up with a plan for how you’ll manage to exchange currency once you arrive at your destination. 

Maybe you have some cash on hand and were planning to convert this to the local currency at the airport. That is still an option, but try to minimize the amount of money you exchange. You can do so by determining how much cash you might need for the next 24 hours. Ask yourself these questions to figure out the right amount:  

  • Will you be taking a taxi that requires cash?
  • Can you purchase a public transportation ticket and pay with your credit card? 
  • Are you comfortable spending a few extra minutes looking around the airport for an ATM, or are you in a rush? 
  • Do you mind planning to go to a local bank the following day to exchange your cash for a better currency conversion rate? 

By knowing how much you’ll need for your first few hours on the ground, you’ll be able to exchange just enough and avoid excessive fees.

The  airport currency conversion kiosks are banking on two things: 

  1. Travelers don’t feel comfortable exchanging their money outside of the airport.
  2. Travelers feel like they need local currency before they leave the airport and don’t know their options. 

Don’t fall into the terrible-currency-conversion-rate trap. Be smarter and save money for something more exciting, like that pitcher of sangria you and your friends have been talking about for the last five months. 

Bottom line

Converting your money at the airport can be expensive and should be considered a last resort. There are plenty of other ways to obtain foreign currency without paying exorbitant exchange fees.

Plan ahead by getting foreign currency from your local bank before you set off on your adventure. Or, use the currency conversion services at the airport to exchange small amounts of cash until you can get to an ATM.

And, as always, plan to use your travel credit card as much as you can to avoid foreign transaction fees. As a bonus, you’ll continue racking up those travel rewards so you can start planning your next trip as soon as you return home. 

Featured image by Peter Voronov/Shutterstock.

Erin Lizzo is a contributor to Million Mile Secrets, she covers topics on points and miles, credit cards, airlines, hotels, and general travel.

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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