Planning a trip to Europe involves numerous considerations, and one common question that arises is: “Should I Exchange Money Before I Travel To Europe?”. Many travelers wonder if it’s best to arrive with euros or pounds already in hand. However, there are several factors to consider to ensure you get the most out of your travel budget.
Why You Should Reconsider Exchanging Money Before You Go
While it might seem convenient to have foreign currency before you land, exchanging money beforehand often leads to unfavorable exchange rates. You’re likely to encounter better rates once you arrive in Europe.
Euro coins and banknotes representing the Eurozone currency
The Drawbacks of Currency Exchange
Exchanging money can be costly. Typically, you’ll lose around 5% to 10% when converting dollars to euros or other foreign currencies. Currency exchange desks at major train stations or airports might seem convenient, but they often come with exchange rates as high as 15%.
When Exchanging Money Might Be Necessary
There are exceptions where exchanging money can be practical, such as in emergencies when your card doesn’t work, if the local ATM is out of service or when crossing into a country with a different currency.
If you find yourself needing to exchange money, look for options that don’t charge a commission. Also, pay attention to the difference between the “buy” rate (the rate at which the bank buys foreign currency from you) and the “sell” rate (the rate at which the bank sells foreign currency to you). A reasonable difference between these rates is less than 10 percent.
Note that European banks typically don’t exchange money unless you have an account with them. In some countries, the post office may offer currency exchange services.
The Advantage of Using Local Cash
While some establishments may advertise that they “accept dollars,” be cautious. These places often apply unfavorable exchange rates, potentially increasing the cost of your purchase by around 20%. Similarly, in non-eurozone countries, paying with euros can result in a poor exchange rate. For example, in Switzerland, while some ATMs dispense euros and prices are sometimes listed in both currencies, using Swiss francs will generally save you money.
Swiss Francs, the official currency of Switzerland, showcase the country's financial system
Credit Cards and Cash Advances
Using your credit card to withdraw cash from an ATM should only be done in emergencies. You’ll need to know your PIN, and you’ll likely be charged a cash-advance fee.
Understanding Currency Conversions
Each European currency operates on a decimal system, similar to the U.S. dollar. There are 100 “little ones” (cents, pence, groszy, stotinki) in every “big one” (euro, pound, zÅ‚oty, lev).
It’s helpful to know approximate exchange rates. For instance, if €1 equals $1.10, a €5 strudel would cost $5.50. You can use currency converter apps or simply do a rough calculation to get a good enough estimate.
A person using a smartphone to calculate currency exchange rates while traveling in Europe
Be Mindful of Being Shortchanged
Always double-check your change in various settings, such as banks, restaurants, and ticket booths. Some individuals may take advantage of tourists unfamiliar with the local currency.
Managing Cash Withdrawals
Try to avoid having a significant amount of unused currency when traveling between countries that use different currencies. However, it’s also wise to minimize frequent ATM visits to reduce withdrawal fees. Plan your withdrawals strategically.
Using Coins Before Leaving
Since coins have significant value in Europe, avoid accumulating a pocketful of change before leaving a currency zone. Spend them, exchange them for bills, or give them away. Euro coins are valid in any country that uses the euro, regardless of the national side.
Multicurrency Accounts
Multicurrency accounts can be useful for frequent travelers who spend extended periods abroad, as they allow you to manage different currencies in one account and avoid unpredictable exchange rates. For occasional vacationers, a fee-free credit card may be more practical.
Conclusion: Making the Smart Choice
In conclusion, while the idea of having foreign currency before your trip to Europe might seem appealing, it’s generally more cost-effective to wait until you arrive to withdraw money from ATMs. By being mindful of exchange rates, fees, and local currency practices, you can make the most of your travel budget and enjoy a smoother, more economical trip.
