If you travel to other countries a lot you know it's alway easier to purchase goods and services with the local currency. We all tend to get local currency at one point before, during or after our trip. I've seen many people stop at the local foreign exchange booth whether near the airport, resort or theme park. Did you know that that is the most expensive way to get your money transferred into local currency? It's practically highway robbery and I'm surprised it is legal. Sometimes we look online via our smartphone and see type "USD conversion to (whatever local currency)". Some of us see a number, think to ourselves "That sounds good!" and go to the local currency exchange and make a transaction. For an even fewer percent of us, we check the currency booth rate of exchange against what we found on the internet, note the difference, and continue the transaction never really understanding why the rates vary.

In short, the rates vary because you are getting screwed. The last place you want to get your money exchanged into the local currency is at these booths. They are profit machines for the owners, pocket drains on the customer. Ideally, you want to pull money out of an ATM from a debit account or get the money exchanged at a local branch of your bank. Below offers some information on how this system works giving you an example that I went through.

International Bank Rate - the one found on the internet (Below). Only institutions use this rate to trade money amongst themselves. We do not have access to this rate. Every trader we trade our money with has their own rate.

650EUR converts to $888US = International Bank Rate

TD Bank
$650EUR converts to $821US ($7 fee) You've lost only 7.5%

Travelex - currency exchange chain all over the world
$650EUR converts to $762US ($126 difference from Int bank rate) You've lost 14%!

In summary, exchange your money through a financial institution you have an account in.

Here is a link to an article that goes into even more depth. Below is a segment of the article you may find helpful.
Say you're traveling to Greece and you want to land with 100,000 drachmas. If you walked into a branch of the Bank of New York, one of the nation's largest banks, you'd pay $335 for them, based on the exchange rate in early March. A travel agent using ezForex would charge you $316. And if you went through Currency to Go, you'd pay $320, including a $10 shipping charge. None of those prices sound outrageous, until you check the wholesale rate: just $289.25. (The wholesale, or "interbank," rate is the one posted in the business section of most newspapers. It's what banks charge each other to convert large sums of money.)

The best option for obtaining cash abroad is to use your bank's debit card at an ATM upon arrival. There are now more than 800,000 ATM's worldwide, including locations in most international airports and on all seven continents (for the record, there's one at McMurdo Station in Antarctica), so you're almost certain to find one where you're going. The two major ATM networks—Plus, run by Visa, and Cirrus, run by MasterCard—both have online ATM locators, so you can verify there's one at your destination before you leave (www.visa.com for Plus, www.mastercard.com for Cirrus). Just be sure you have a four-digit PIN, and know it by numbers rather than letters—many foreign ATM's don't have letters on their keys.

Although you won't secure the wholesale rate using an ATM, you'll come close: Both Plus and Cirrus add a 1 percent conversion fee to the wholesale rate (for example, if you withdraw 500 deutsche marks, your account will be charged the U.S. dollar equivalent of 505 DM, converted at the wholesale rate). On top of that, your bank will usually charge an ATM fee of $2 to $3. Some charge more for overseas transactions, though, so call your bank before leaving to make sure its fee is not exorbitant.

Even paying a surcharge, you'll save over exchanging in the States. If you wait until you arrive at Hellinikón International to get those 100,000 Greek drachmas, you can go to the ATM there and withdraw that amount for just $295.14, including the 1 percent exchange fee and an ATM fee of $3. That's $20 to $40 less than you would have paid at home enough for lunch overlooking the Aegean.



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