Self Portrait / Exchange Rates (Photo credit: Dominic’s pics)
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 places at the airports are the worst. You could pay as much as 25% higher than the World Bank Rate. That means a Euro rate of 1 Euro costing you $1.35 would really cost you $1.69 or $.34 cents more on every dollar you spend. Banks are the lowest buteir 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 onto of their inflated rates. Shop around again. There are credit cards that do not charge fees but they will inflate rates. 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 $169,00. That is $34,000 over the World Bank Rate. Their are brokers in the UK 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 dollars you save can help pay for your trip. Enjoy!
George & Jo Anne
Categories: Europe, Exchange Rates, General Travel
Tags: Bank, Business, Credit card, Currency, Exchange rate, Foreign exchange market, No Tour Touring, Recreation, World Bank
Credit cards Français : Cartes de crédit Italiano: Carte di credito Русский: Банковские карты Tiếng Việt: Thẻ tín dụng 中文: 信用卡 (Photo credit: Wikipedia)
Currency Conversion is a difficult and confusing area. It can be very expensive and most people don’t even realize it. Banks mark up the World Bank Rate (what you see on the internet). Some banks mark up .05 to .09 cents. If you are converting a 1000 dollars to euros the difference is:
- Internet Rate of 1.3 would give you 769.23 euros (1000/1.3)
- Bank charges 1.35 would give you 740.74 euros (a loss of 28.49 euros)
- Bank charges 1.39 would give you 719.42 euros (a loss of 49.81 euros)
Some rules to watch for:
- Never use exchange facilities at airports. They can be very high
- Hotels charge more than banks usually
- Using a foreign ATM’s can be very good but check if your debit/credit card has fees in addition to exchange
- Some Credit Cards have fees in addition to the increased exchange rate
Foreign currency exchange is a big business and very profitable. Don’t be fooled!
Categories: Exchange Rates, General Travel
Tags: Automated teller machine, Bank, Bank charge, Credit card, Currency, Exchange rate, Exchange Rates, Financial Services, Italian people, Italy, No Tour Touring, Tourism, Transactional account, World Bank