Currency Exchange Thoughts

Editor’s Note: A version of this column appeared in the San Antonio Express-News this morning.


When we decided to move to San Antonio five years ago, my only condition to my wife was that we would travel as a family outside of Texas for some time during the worst Summer months.

I had already encountered wise words from a pre-air conditioning era:

“If I owned two houses, one in Texas and the other in Hell, I would rent out the one in Texas and live in Hell!”

How will all of this relate to finance, you may ask? I’ll tell you why. We had a lovely family trip to Europe this Summer.

And the main point of mentioning a family trip to Europe, as always, is to talk about currency exchange. Am I right?

Back in the bad old days of travel, planning to exchange your currency mattered. Three methods prevailed, all of them terrible.

Method one: A highly Type A personality would visit her bank weeks in advance of a trip and request a conversion of a set amount of dollars into the destination country currency. Your bank, assuming it was large enough to do currency conversions, would fulfill your request at some terrible rate of exchange to make up for the fact that this was an inconvenience for them.

Method two: Purchase traveler’s checks. These goofy checks in overly large denominations required one personal signature in the upper left corner ahead of time before you left the bank premises. Make sure you sign in the right place! No! Not there! And don’t sign both lines! You’re doing it wrong. Arrgh.

Once you landed in the destination country any vender from whom you wanted to make a purchase refused to actually take traveler’s checks.

Instead, the traveler’s checks required you to travel for three days by burro to find an actual bank willing to make the exchange, where you would need to show your passport and give a blood sample to verify your identity. If I recall correctly, the wait at the bank teller in the destination country typically lasted 18 hours, for security purposes.

Method three: Change money at the destination airport. Anyone not Type A enough for the first two methods did this. Of course this meant that you paid an exchange rate reserved for the dumbest people on the planet.

Having successfully changed currency by one of these three methods, usually in an amount too large for your needs, you would need to safeguard the precious new Monopoly-play money at all costs.

This new fear of lost currency led perversely to a visceral abomination known as ‘the fanny pack.’

Nothing says “I don’t belong here and I’m probably carrying both my passport and too much currency right here around my waist where you could probably steal it if you really wanted to” quite like those fanny pack fashion horror shows.


But, of course, we all used them. It happened, after all, in the distant past, when hair styles were universally offensive and clothing was humorous.

These days, currency exchange problems are nearly non-existent. Your debit card works at ATMs available in the foreign country on almost as many corners as a Starbucks, and you can take out just as much or as little as you need. The currency exchange rate for an ATM withdrawal, typically, is extremely fair, as it reflects the wholesale exchange rate of large banks, rather than the bandido rate of an airport exchange kiosk catering to Type B individuals.

Speaking of exchange rates, I experienced one financial innovation this Summer upon exchanging currency at the first ATM I visited in Europe. Before completing my withdrawal, the ATM menu asked whether I would like to ‘lock in’ a certain exchange rate, or ‘take the risk’ of whatever market rate I received from my bank.

Being financially savvy, I recognized the trick here, and I would recommend fellow travelers confronted with this choice at the foreign ATM to forgo the ‘locked rate.’

I feel certain that the ‘safety’ of the exchange rate is really the rate analogous to the airport kiosk, playing on the fears of a traveler.

Take the risk, as there’s a 50% chance you do better, and a 50% chance you do worse, if the currency fluctuates wildly during your trip.

By locking the exchange rate at the ATM, however, I’m 100% certain you will get a rate that suits the bank best, not you.

By the way, does this clever column make my fanny pack look any better? I’m asking for a friend.

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4 Replies to “Currency Exchange Thoughts”

  1. We’re considering a trip to Europe in the near future and this article in the Express-News was very informative. Hopefully, I will have some currency left that I want to exchange for U.S. currency. Can I do this at an ATM as well?

    1. The reverse exchange, changing foreign back into US, is trickier. I ended up being the total Type B person at the airport on my return flight, getting completely taken advantage of by a terrible exchange rate (plus fees!) at the airport kiosk. Only saving grace: It was about $50 bucks worth.

  2. Spot on. I did the math after a couple of ATM withdrawals this summer: the ATM “lock-in” rate would have resulted in a USD debit from my checking account of about $7 more! (on a ~$150 ATM withdrawal)

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Public Speaking


I founded Bankers Anonymous because, as a recovering banker, I believe that the gap between the financial world as I know it and the public discourse about finance is more than just a problem for a family trying to balance their checkbook, or politicians trying to score points over next year’s budget – it is a weakness of our civil society. For reals. It’s also really fun for me.

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