Do I get a better deal if I buy USD (using GBP) in the US or outside?
I will be travelling to the US (JFK arrival) next month and trying to find out what the best option is for me to buy USD. I am planning to exchange around £400 worth of USD. Should I buy it outside the US or inside? I heard that buying it at the airport is a bit of rubbish because they cheat you!
Any advice?
Best Answer
I suspect that you'll get a better exchange rate in England, for the reason that currency exchange is much more common there than in the US (given its proximity to other nations with different currency). But changing physical currency is a bad idea anywhere, at least for more than say $50 to get you through the airport.
The reason is that you're dealing with a retail transaction. The exchange bureau sets its rates so that (1) it covers the costs of having a person present to physically exchange currency, and (2) it makes a profit even if the real exchange rates fluctuate (within reason).
You'll get the best rate when using a credit card, because the card transactions are cleared at the interbank rate. However, your card issuer may charge a foreign transaction fee (in the US, at least, you can find cards that do not charge this fee).
The second best rate is to use your ATM card to withdraw money from your personal bank account. Again, this is settled at the interbank rate, and again may incur a foreign transaction fee and/or bank fees. There are some international ATM agreements that reduce or eliminate these fees.
Bottom line: talk to your bank and credit card company. And change 50 pounds before getting on the plane.
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Is better to pay in pounds or US dollars?
Typically you are better off opting to pay in the local currency, rather than converting to Sterling as you make the purchase. If you pay using the local currency, the transaction will then be converted into Sterling at the Mastercard, Visa or Amex own rate.Is it better to exchange money in US or UK?
You generally get a better rate if you exchange in Europe. However, you need to keep in mind commissions and foreign transaction fees.Is GBP getting stronger against USD?
For over 20 years the GBP has been stronger than the USD. Brexit weakened the British pound currency. In the 21st century, the GBP/USD pair has seen highs of around 2.00 and lows of around 1.22.What is the cheapest way to buy US dollars?
Though there may be a small fee, your bank or credit union will almost always be the best place to exchange currency (and the cheapest). You may be able to order currency at a branch location or by phone or online to have it delivered to you, or to pick up at a branch.TIME TO BUY USD? (Here's Why It Could LAUNCH)
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Answer 2
As you wish to exchange £s, then moneysavingexpert is well worth reading, on it’s Cheap Travel Money page it explains the best credit and debit cards for getting cash outside of the UK.
I have not tried to summarize the information, as it keeps changing and the Money saving expert page has been kept updated for years.
I have found it is very hard to beat a debit card for exchange rates when getting cash.
We tend to exchange enough money for the first few days at the airport on the way out and pay a few pounds for the Buy Back option. Then on the last day get enough money out of an ATM that we can sell back all the money we got from the airport, hence benefiting from the better exchange rate at the ATM.
Sources: Stack Exchange - This article follows the attribution requirements of Stack Exchange and is licensed under CC BY-SA 3.0.
Images: Pixabay, Erik Scheel, Karolina Grabowska, subbu noir