After passing through the security checks and baggage screening, there remains about an hour until your plane leaves for the destination abroad. As soon as you pass by the glowing currency exchange stand, you realise you still have not organised money for travelling. It suddenly seems very easy to buy your money from the booth on the spot. After you put Australian dollars in the machine, you receive your currency and proceed to the departure gate. However, your convenience comes along with extremely high costs of doing so.
The Unfairness of Airport Exchange Rates Explained
It is very likely that when comparing exchange rates displayed in the airport terminal with the ones shown during the evening news or on the internet, you will notice that the first number looks drastically different from others. Airport currency exchange booths do not use the mid-market rate, which is the true exchange rate of your currency on the international markets. Instead, the booth puts a big margin on its side.
Apart from a very poor exchange rate, some exchange booths also charge either flat commission or percentage of the transaction sum for using their services. Although some of the booths claim to offer zero commission for changing your currency, they make up for it by offering an even poorer exchange rate. This way, at the end of the transaction, you can find yourself deprived of quite a bit of spending money.
How Can They Charge So Much?
One may ask, why do currency exchange booths at airports charge so much for the transaction? The answer lies in the fact that operating such a business is quite costly for the company. Firstly, the vendor should pay much higher rent for placing its booth right near departure gates and lounges. Moreover, it costs much more to employ the staff and keep them safe as the vendors usually operate at the busy and crowded areas.
Secondly, currency exchange stands in the airports benefit from the fact that people who need foreign cash are completely limited in choice of places they can obtain it from. Once you have passed the security checkpoint, it is practically impossible to acquire money somewhere else in the airport. In case of necessity to pay for taxi or give tips to someone in the airport, people become captive to exchange stands’ offers.
Better Ways of Organising Foreign Cash
Luckily for us, there exist many alternatives that allow saving your money in case you are traveling abroad. For example, using international ATM upon arrival will help you receive cash at a cheaper rate than exchange booths would offer you in Australia. Indeed, you may suffer from an international fee charged by your bank upon withdrawing cash abroad. However, the exchange rate that will be offered is close to the true mid-market rate.
Alternatively, you can use a no-fee international travel card from banks like ING for spending money abroad. Nowadays, numerous banking institutions offer customers special cards that do not charge them fees while using abroad. Thus, all you have to do is tap or swipe the card as usual. You will obtain money in your destination currency, enjoying low fees charged by the credit card network.
Lastly, if you would like to carry cash with you, then ordering your money before departure will save you a lot of money. In order to order currency, contact your local bank office or an online currency provider in advance to obtain money.
Save Money for Spending Abroad
Traveling internationally takes time and organisation to make everything go smoothly. When dealing with money for spending abroad, you should be very careful because airport currency exchange booths offer terrible rates and extra commissions for you. Using alternative options such as ATMs or prepaid cash allows organising better financial conditions abroad!
