If you have experience flying internationally, you will likely be used to seeing the airport currency exchange counter at all of the International Terminals. And while it may seem like a convenient way to exchange your funds, there are actually a few reasons why you should avoid it. The four reasons outlined below will show you that what at first glance seems like a convenient service is in fact very expensive and why you should avoid airport currency exchange when traveling:
1. Limited competition results in poor exchange rates
Airport currency exchanges have no incentive to offer competitive exchange rates because travelers have limited options once they are in the airport and many take advantage of this. Foreign currency conversion rates fluctuate with changes in the financial market and each currency exchange company is free to set its own rates and the frequency at which these rates are updated. In order to decrease the chance of incurring a loss and generate maximum profit, most airport currency exchange counters operate on very large “spreads” or margins and update the conversion rates only when it is beneficial to them. By planning ahead and using a reputable currency exchange company like Interchange Currency Exchange that has live market prices you can get the most benefit out of your travel budget.
2. Unnecessary fees & charges
Ever paid an unusually large sum of money to buy a coffee or magazine at the airport when you know you could have bought the exact same thing for much cheaper outside the airport? Well it’s no different when you exchange your currency at the airport. Like all retailors operating in the airport, airport currency exchange counters incur higher operating expenses and in many cases have facility fees imposed on them by airport authorities. These higher operating costs are then passed along to travelers in the form of higher fees and prices for currencies bought or sold from travelers. These higher service fees and costs can take many different forms. Some airport exchange counters charge a “service” fee for providing exchange services, which can add up to as much as ten percent of the total exchange, while some airport exchange counters charge a flat rate or a percentage of the total transaction. By using a reputable currency exchange company outside the airport like Interchange Currency Exchange that charges no service fees, you can completely eliminate any additional fees and charges for obtaining foreign currency.
3. Peace of mind & safety
In addition to costs savings, other important reasons seasoned travelers choose to convert their currency prior to travel are personal comfort and safety. Exchanging any amount of currency in a busy airport is a recipe for disaster. Not only does the hustle and bustle of the airport make travelers more forgetful and scattered, but the added stress of everything that is going on will not allow you to make correct and well-thought- out financial decisions. In terms of safety, many airport currency exchange counters in less developed countries are found outside the terminal and are in full view of anyone walking in off the street. When converting currency, the safest and most comfortable option for any traveler is forgoing the airport currency exchange and taking care of exchanges prior to arriving at the airport. If you are limited in your time you can order currency online or visit a currency company that operates longer retail hours prior to your trip.
4. Limited selection and limited amounts
A long layover may seem to be the perfect opportunity to exchange currency, but it may also throw your plans into disarray if the airport currency exchange counter has a limited amount of your requested currency or has completely run out. When traveling to certain exotic destinations, the airport exchange counter may present another challenge altogether and not offer the currency you need at all. Worse, the currency may be offered at severely inflated exchange rates. If you’re planning a trip to a less commonly visited country, exchanging funds before your flight can save time and aggravations.
While the airport currency exchange may at first glance provide the easiest means to exchange your currency, a more careful look will show that airport currency exchanges are an expensive and potentially stressful way to get the currency you need. Spending a little time planning ahead for your currency needs will not only make your trip safer and more enjoyable but also more cost effective. Happy Travels!