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As a general rule, can one say that it is better to exchange cash for a foreign trip in the country of departure or of arrival? My main concern here is a favorable exchange rate.

As a concrete case, I am planning a trip to Hong Kong and am wondering whether I should carry EUR or (substantial) HKD.

Glorfindel
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Drux
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    For your specific case in Hong Kong, there are a huge number of ATMs that allow you to withdraw HKD using foreign cards as @Glorfindel suggested. There are also a large number of bureau de changes (called 找換店) in the city centre - rates vary, but it is not likely to be as good as ATM rate. – B.Liu Oct 12 '18 at 07:53
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    The use of cards for purchases is somewhat 'polarised' - mid-high end restaurants definitely take cards, but hawkers, more affordable and local restaurants, and transportation providers only takes cash (and often an electronic payment card called Octopus). Depending on how long you will stay in hong kong, I'd recommend bring (or withdraw from an airport ATM) at least HKD 1000 with you, 500 for an octopus (which makes your like 10x easier), and 500 just in case you find something interesting on the street. – B.Liu Oct 12 '18 at 07:55
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    hey Drux, I do this all the time. it is a billion times better to exchange in HK. it's not even close - issue closed. – Fattie Oct 12 '18 at 13:23
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    as everyone has said, it's far easier / better to just withdraw from an ATM, *but to do that, you have to be one of those organized people who knows you have an ATM card that is advantageous internationally* .. a good rate including all fees etc. – Fattie Oct 12 '18 at 13:25

5 Answers5

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A better rule of thumb is to not exchange any cash at all, but use an ATM in the country of arrival to withdraw money, letting your home bank do the currency conversion (so withdraw in HKD, not in EUR; the ATM itself will offer Direct Currency Conversion but that's usually a much worse rate for you). It's also quite logical; HKD banknotes in the Euro zone have to be transported there, so they are more expensive.

That leaves the problem that you might have some HKD left when you leave the country; as long as it's not too much, I tend to keep it for the next visit. Or you can buy something (souvenir, drinks) at the airport. (I don't have any experience in whether it would be better to exchange it back to EUR in Hong Kong or in Europe, so I'll leave that part to another user.)

Anecdotal evidence: in some (Western/Northern European) countries you don't even need cash at all. I recently visited Iceland and the only moment when I didn't have the option to pay by card was the offerings during the church service...

Glorfindel
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  • Even some churches take cards: https://www.ft.com/content/2e803942-5817-11e7-9fed-c19e2700005f – Mark Perryman Oct 12 '18 at 12:17
  • I'm not sure this is true. Most cards will charge a currency conversion fee, and you may well be charged to withdraw money at all from a foreign ATM. For example, checking just now with https://www.visaeurope.com/making-payments/exchange-rates against https://www.money.co.uk/travel-money.htm suggests I'd get an exchange rate of around 1.112 eur/gbp by using my card, or 1.128 by ordering online in the UK. – Jack Aidley Oct 12 '18 at 12:39
  • @JackAidley The answer is correct. I marvel that people continue to use currency exchange. The rate you get from the ATM (regardless of fees) is almost always better than what you get from the currency changers. And if like me you use Bank of America which allows you to withdraw money without fees from other Banks in the ATM Global Alliance, it is even sweeter. – Augustine of Hippo Oct 12 '18 at 13:02
  • I checked it for USD versus Pounds Sterling and using the ATM is better.100.00 Pound Sterling = 132.49 United States Dollar for using a card and 100.00 Pound Sterling = 130.00 United States Dollar for using currency exchanges. – Augustine of Hippo Oct 12 '18 at 13:09
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    Glor, while (1) this is completely true and (2) I like you, it's a shame to just absolutely not answer the question, don't you think ?! – Fattie Oct 12 '18 at 13:24
  • Take care, many folks are tricked by the (absurd) "no! Fees!" advertising slogan that some ad agency came up with for a bank, and now they all use it. (Obviously, they just *adjust the rate slightly* on your transaction to add in whatever "fee" they want, and then don't print a "fee!" line item. The "no fee" claim is incredibly silly.) – Fattie Oct 12 '18 at 13:30
  • @MusoniusRufus: It has never been true anytime I have checked. Getting money online has always been better. Now, personally, I still use ATMs for travel from Germany to the UK because they're more convenient and the differences are small, but for larger sums ordering money online is worth it. – Jack Aidley Oct 12 '18 at 13:57
  • @MusoniusRufus: Cards which don't charge a fee can, of course, make all the difference. – Jack Aidley Oct 12 '18 at 13:58
  • @JackAidley Well I just checked using the same sites you provided and provided the numbers. Unless you are disputing the numbers, in which case you can plug them in yourself. Or maybe for UK £ to other currencies it is different, however for me from USD to other currencies, using the ATM has been better every single time. – Augustine of Hippo Oct 12 '18 at 14:41
  • @MusoniusRufus That's quite possible. I gave the numbers I found in my first comment, including the conversion fee from the card I have. But wouldn't you say that differing experiences suggests that the asker should check rather than assuming? – Jack Aidley Oct 12 '18 at 14:56
  • @Fattie it doesn't happen too often on Travel.SE, but I believe this is an XY problem. – Glorfindel Oct 12 '18 at 15:46
  • @JackAidley the OP asked for a general rule. I do not doubt that there are situations where it's better to exchange/order foreign cash; just that they're relatively rare. – Glorfindel Oct 12 '18 at 15:48
  • @Glorfindel old bean, that doesn't make much sense, I'm afraid. For example (like any frequent traveller, as you point out) I just use a cash card and withdraw cash. But, it's totally common that you also have a pile of damned cash on you, and you need to change it. I guess, you could read this question that way: "Say you do have" a pile of cash on you and need to change, which end is best? Anyways no worries! Bon voyage! :) – Fattie Oct 12 '18 at 16:08
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    @MusoniusRufus It depends on where you are going. In locations with high demand for currency exchange services and enough exchange offices to provide real competition, it is not rare nor unlikely that it is cheaper to exchange cash than to withdraw from an ATM. The last time I exchanged currency was in the Czech Republic. The mid-market rate for €1 was CZK 25.20 and the first exchange office I stopped at offered CZK 25.00 for €1. Had I withdrawn money from an ATM, my bank would have given me CZK 24.20 per € and charged an additional €6 fixed fee. – Tor-Einar Jarnbjo Oct 12 '18 at 16:09
  • Per Tor's Comment, another exception is if you're changing Large Amounts (say, 10 grand US +) of cash. In theory you'd usually be better with a (good) change in that case. {Of course, these days anyone with Large amounts of Cash is a terrorist, so it's sort of moot.} – Fattie Oct 12 '18 at 16:13
  • @Glorfindel: That's my point: I don't think they are relatively rare. It has been the case every single time I've needed money. Maybe that's a UK thing; I don't know, but then I don't know where the OP is from either. Now I could pay extra for a card that doesn't charge to withdraw in other currencies, which would reverse the situation, but then - of course - I'm paying for it. – Jack Aidley Oct 12 '18 at 16:15
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    It's the worst general advice you can give. Either you have little experience with travel, or you travel only to special category of countries. There are countries where ATM network might have an outage or simply no ATM, for whatever reason, will not accept any of your cards. Relying on ATM is the receipt for the disaster. – Danubian Sailor Oct 12 '18 at 17:19
  • Yeah, it's probably better as anecdotal evidence. In my mind, there was a greater distinction between the first part of the answer and the last paragraph, but I failed to put that in words. – Glorfindel Oct 12 '18 at 20:04
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    @DanubianSailor Anyone with commonsense will check if there are ATMs etc before choosing that option. Even in Somalia they have functional ATM's. – Augustine of Hippo Oct 12 '18 at 20:57
  • Fair enough and I'll carry an ATM card as well. But I am still wondering what the better choice is among the two described. I recognize that neither may be the best. ATM cards also have their downsides. For instance, there are certain protection mechanisms that prevents use of ATM cards in most Asian countries unless the holder explicitly asks for an exception. There may be other such technical hurdles or additional transactions feeds. IMHO cash is conceptually nice and simple (but also has its own downsides, of course). – Drux Oct 12 '18 at 21:57
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There is no general rule.

At the moment Wikipedia lists 180 currencies being used throughout the world. Do not expect banks (or even some small exchange offices) throughout the world to have all of them. Actually, should I decide to travel tomorrow to some small country in Africa with substantial cash, I would probably have to change cash twice. At home in the Czech republic from our crowns to euros or dollars (or something like that, internationally known) and then after arriving from euros or dollars to local currency. Because there is no option to obtain that exotic currency here at home and after arrival I would have probably hard time trying to find someone willing to buy Czech crowns.

If you are lucky and can choose, my tip would be to choose the more recognized and respected currency. If all goes well, it does not really matter what you have, but if there is some natural disaster (like volcano eruption) or something and your airplane gets diverged to an airport in some third country where you get stuck for days or even weeks, you definitely want to have locally recognized cash to get by and not somethings locals have never seen not heard of.

JJZ
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    I'd bold dollars and euros. Dollars are considered the hard currency - something that have a chance to be exchanged almost anywhere on the world where foreign currencies are exchanged. – Danubian Sailor Oct 12 '18 at 17:21
  • Do you have a source that there is no general rule? If you think in terms of supply and demand, one should think one should buy the foreign currency in that foreign country (big supply) and sell it in your country. Doesnt it work like this? – lalala Jun 14 '19 at 11:29
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I concur with Glorfindel, the best option is usually just to withdraw at local ATMs and use your card directly for most payments.

A few caveats, though:

  • You must of course have a card that can be used internationally and widely accepted (should be the case of all VISA, MasterCard and Maestro cards).
  • Check your card issuer's fees for withdrawals, payments and the exchange rate they use. It can vary quite substantially. Note that in most cases, it's cheaper to pay rather than withdraw. Some banks may have an international presence or international partners where fees are lower or waived.
  • Make sure you inform your bank that you are travelling abroad. Some have dedicated interfaces for that on their online banking service (you specify the country and travel dates), others will require you call them.
  • Check that the ATM you are planning to use does indeed take the right type of card. There are stories of cards "swallowed" because they're the wrong type.
  • Take a bit of your own local money to exchange just in case there's a problem.
  • Usually, refuse the offer for currency conversion by the ATM or payment terminals, though of course you should compare with the rate your bank offers.
  • In some countries, some of the ATMs may add their own fee when withdrawing. This is becoming quite common in the US.
  • Make a note of your card details and emergency contact before you leave.

In most cases, fees (by your bank or by the ATM, other than currency exchange) are usually a fixed amount per transaction, so larger withdrawals/payments cost you less, but YMMV.

jcaron
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  • "Check your card issuer's fees" should be bolded, because those can be substantial. What's more, if your card is denominated in some funny currency and you travel to country with some other funny currency, your transactions might be exchanged twice (their funny currency ->USD/EUR, then USD/EUR -> your funny currency). – el.pescado - нет войне Oct 12 '18 at 19:45
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In my experience, if I have to change currency (and cannot withdraw cash as the other answers suggest), usually the rates seemed better at the country of departure, probably because you can choose to do it outside of airports, so more choice means better rates.

However, the one exception I've encountered was Singapore: exchanging Euros there seemed much, much better than buying Singapore dollars in Europe. But Singapore is a hub country full of traveling foreigners, which probably explains it.

If Hong Kong follows a similar pattern, then it could be better to sell euros there, instead of buying HKD in Europe.

anol
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  • anol, I have never, ever, EVER, found this to be the case. It's always better at the "there" country. And I've never heard anyone suggest the contrary. It's really "common knowledge" you get a better rate "there", I'm afraid. – Fattie Oct 12 '18 at 13:27
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    "probably because you can choose to do it outside of airports" .. ? Why wouldn't you do it "outside the airport" at the arrival country? – Fattie Oct 12 '18 at 13:28
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    @Fattie The answer said in their own experience. Who are you to question that? – Augustine of Hippo Oct 12 '18 at 13:32
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    @Fattie It probably matters what the home country and destination country are, and which has the more powerful currency internationally. With, say, British pounds or US dollars I'd change at the destination, but if someone is selling Moroccan dirhams or Sri Lankan rupees in the UK or US, they're probably eager to get rid of them. – choster Oct 12 '18 at 13:48
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    @Fattie I once had to exchange (or withdraw, I don't remember) polnish zloty at the airport simply becausethe automat selling tickets for the airport-to-town bus didn't accept any currency other than zloty. Especially when there is a flat fee on withdrawal/exchange, and one doesn't know the destination city well, and is tired and longs for a feeling of certainty and a hot drink, getting the money for the first 1-2 days (as opposed to just the bus price) is very tempting. – rumtscho Oct 12 '18 at 15:33
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    There is no such rule. There are some countries that have poor exchange rates (poor for the client, great for the bank) and some that have good exchange rates. If you come from the 1st one, than it's no wonder that you find out that there's almost always to exchange money 'there'. – Danubian Sailor Oct 12 '18 at 17:23
  • @Fattie - "Why wouldn't you do it 'outside the airport' at the arrival country?" Because you need cash to pay for transportation out of the airport! – Nick Oct 12 '18 at 20:58
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Not a big deal but

Just one point nobody mentioned...

Say you're in Local country and you have (exactly) 500 units (5x 100 notes).

When you go to Distant Country, you can give them the 500 and get in return in your hand

the precise amount of local currency, to the cent (peso .. yen . whatever) including small change.

If you change in Local country, they don't keep small change in Distant Currency. You get annoying rounding issues.

In general for this reason, and the rate, you always change "there" not "here".

(If, for some reason, you archaically are dealing in cash.)

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