Self Portrait / Exchange Rates (Photo credit: Dominic’s pics)
Exchange rates can be good or bad and are usually very ugly! A vacation can suddenly cost you much more because you exchanged money at the wrong place.
Most people are unaware of how expensive exchange rates can be. The World Bank sets rates each day. These are what we see on the Internet. Everyone charges higher rates than these so they can make money. The question is how much higher. Exchange booths at the airports are the worst. DO NOT USE THESE PLACES! You could pay as much as 25% higher than the World Bank Rate. That means a Euro rate of 1 Euro costing you $1.10 would really cost you $1.38 or $.28 cents more on every dollar you spend. A $3,000 vacation becomes $ 3,840. Could use have used that extra $840? Banks are the lowest but their rates vary a lot. Shop around. Banks that don’t stock foreign currency will charge their suppliers rate plus add their own on or charge a flat fee.
On top of that many credit cards charge a fee on top of their already inflated rates. Today many credit cards are offering no fee foreign purchases. This does not include getting cash at an ATM! The extra fee is dropped but they still inflate the World Bank Rate. These cards however, are usually your best rate for foreign purchases. Shop around for the best card.
If you are moving very large amounts of money like to buy a home beware! 100,000 euro purchase would, at the above rates, cost you $138,00. That is $28,000 over the World Bank Rate. There are brokers in the UK and some in the US that will give you World Bank Rates for large amounts of exchange and NO fees. You send them dollars and they place Euros into your foreign bank account.
Every dollar you save can help pay for your trip. Exchange your left over Euros back to dollars is very ugly. You lose another 25% on the exchange or more. These Euros cost you an amazing 50%. We go to Italy so often we never change Euros back to dollars. We just hold on to them until the next vacation. If we need a few Euros so we would have some cash in Europe, we would order money at a local bank with favorable rates. Then charge most things in Europe on our no fee credit card.
George & Jo Anne
Categories: Dollars, Euro, Europe, Exchange Rates, General Travel, Italy, World Bank Rates
Tags: Banks, Credit card, Dollar, Euro, Exchange Rates, Tourism, Travel, Travel and Tourism, World Bank Rates
Money is a very personal thing. How much you need is related to how you spend, what you buy and how often. If you are going buy Gucci products in Italy, you will need some money. We like to arrive with some Euros in our pocket. Maybe 200- 400 so we can buy tickets, take a taxi, etc. Most restaurants and stores take credit cards. There used to be a problem at some places because the European credit card machines require a computer chip on their credit cards. The US has finally caught up to the rest of the world and most banks are now issuing credit cards with both the old stripe and the new chip. Choose a credit card that does NOT charge an extra foreign transaction fee. There are many today to choose from.
You can get money from a European ATM easily. His is the easiest way to replenish your cash. Banks offer great exchange rates but can take a while to fill out paperwork and get your cash. When you are returning home, don’t exchange your Euros back to dollars if you plan another trip in the next few years. The double exchange is very costly. Hold on to your Euros with your passports and use them on the next trip.
Traveling is fun and money shouldn’t be the main concern. You are on vacation and you should relax and enjoy the trip.
George & Jo Anne
Categories: Cash, Dollars, Euro, Europe, Exchange Rates, Italy, Taxi
Tags: cash, Dollar, Euro, Exchange Rates, Italian, Italian people, Italy, Money, No Tour Touring, Taxi, Tourism, Travel, Travel and Tourism
Yesterday we talked about can you afford Italy. Any discussion on cost in a foreign country has to take into consideration the conversion rates. Last year it cost $1.34 to buy 1 Euro. That was the World Bank Rate. Your actual costs were higher depending on where you buy the Euros. Banks add-on .10 to .15 cents and exchange booths at the airport add-on much more! The best conversions are often with credit cards. They add-on an amount but not as high usually as banks and exchanges places. Many credit card companies now offer no fee foreign purchases. They still tack on cents to the World Bank rate but do not then charge an addition fee for foreign purchases.
Today the rate is $1.08 per Euro. That is a savings of $.26 per Euro from last year. If you spend $3,000 that is a savings of $780. That will buy you something nice on your trip. Europe has not been as cheap in a long time. Now is the time to book a trip and enjoy romantic Italy. The lower exchange rate makes hotels, meals, gifts, purchases and tours bought in Italy cheaper by 25% from last year. Airfares are the same since you buy them with dollars. If you purchase a local airfare or train tickets while in Italy it also will be 25% cheaper.
Enjoy the savings while it lasts. Check off another item on your bucket list!
George & Jo Anne
Categories: Air Fares, Euro, Europe, Exchange Rates, Hotels, Italy, Money, Trains
Tags: Dollar vs Euro exchange rate, Euro, Food, Italian, Italian cuisine, Italian people, Italy, No Tour Touring, Romance, Tourism, Travel, Travel and Tourism
Exchange rates can make or break your vacation. I remember years ago traveling in Italy. It was the Lira then. One trip I was walking by the street with all the designers in Milan thinking these prices are ridiculously high! The next trip the dollar was high and walking the same street, I thought prices are high but I can do that. A small swing in exchange rates can give you more money to spend or end up costing you more. The dollar and Euro has been favoring the Euro. The price of a Euro is dropping! It is expected to drop to around $1.28 (currently at $133).
You have to afford a vacation but money should not be the only criteria. What makes memories are your experiences, who you travelled with and what you saw. Enjoy your trip. Immerse yourself in the life of the country you are visiting. It is NOT America so don’t compare things. Just enjoy and have fun.
George & Jo Anne