Where To Exchange Currency Without Paying High Fees

Exchanging currency for a move abroad can be challenging, because of the often high fees involved.

Moving overseas is expensive enough already, which is why looking for cost-effective ways to convert currency is important. You don’t want to spend extra when you could be saving money.

We’ve created this guide to help you avoid paying high fees for exchanging currency, covering everything you need to know.

This includes where to exchange currency, where not to exchange currency, and some top tips on reducing the overall cost of exchanging currency.

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Where can you exchange currency without paying high fees?

There are several services you can use and places you can go to to exchange currency without paying high fees. Here’s our list:

• Online currency converters or bureau: Services such as Wise are ideal for small day-to-day transactions.
• Online currency exchange broker: Services such as Key Currency. These are best used for larger transactions.
• Local banks: If you have a bank nearby, this can be a convenient option.

Image credit: ASPhotography, Pixabay

Use an online currency converter or bureau

An online currency converter, such as Wise, is basically a tool that lets you send and exchange money internationally. What’s ideal about Wise is that it uses the real exchange rate and doesn’t include hidden fees.

This makes Wise a great option for regular day-to-day transactions, as you don’t have to pay an extortionate fee every time you move or spend money using the platform. You can also get a Wise debit card, which claims to never be subject to exchange rate markups, or high transaction fees when you use it abroad.

Trust us, getting regular transactions using an ordinary debit card adds up quicker than you might expect.

Wise is as safe as can be too, as it’s fully regulated by the Financial Conduct Authority (FCA). A lot of money gets moved securely on Wise — roughly £30 billion transferred by over 10 million people each quarter!

Use an online currency exchange broker

For large money transfers or transactions (such as when buying property), you’ll want to use an online currency exchange broker, such as Key Currency.

By using Key Currency, you’ll get support and guidance from a dedicated account manager on complex transfers, such as securing a fixed rate for multiple transactions over a specific period.

Key Currency will work with you to agree the right time to exchange your money, so you avoid having to accept whatever rate a bank or online-only platform gives you on the day.

This is a huge relief, because there is so much extra hassle to think about already when it comes to buying something like property abroad. Key Currency is fully regulated by the FCA, so you know it’s a service you can trust with your money.

Generally speaking, Key Currency is best saved for large, high-value transactions rather than day-to-day use.

So for large transfers that require expert guidance and a tailored service, consider looking at Key Currency’s options and secure competitive rates and excellent support.

Exchange currency at your local bank

For the most convenient way to exchange currency, you can always head to your local bank before you travel. All banks operating in the UK are FCA-regulated, so you have some protection if anything goes wrong.

The downside to using your local bank, however, is that it will typically charge higher fees and can add substantial markups on exchange rates. It is still cheaper to use a bank than something like an airport currency exchange, but it’s worth being aware that you can save more money using online services such as Wise and Key Currency.

Another local option is your nearest post office, but like banks, you’re unlikely to get the best rates.

Tips for getting the best rate at your local bank

Getting the best rate at your local bank isn’t easy, but there are a few things you can try. You should first think about ordering currency in advance – that way you can secure your foreign currency at a rate that works best for you.

The other thing to try – and this does sort of remove the convenience of using a local bank – is to try comparing rates with other banks.

Banks don’t all offer the same rates, and you might find heading further to a different bank could save you money on your currency exchange.

Where to avoid exchanging currency

We all like convenience, but when it comes to exchanging currency it’s almost always an expensive luxury. Sure, you might think it’s easier to just exchange your money when you arrive at your destination airport, but you’ll pay a lot more.

Here’s our picks of where to avoid exchanging currency and why you shouldn’t use these services:

Airport kiosks

An airport kiosk is a very convenient location to exchange currency, but you pay a great deal for this convenience. We’d strongly argue this convenience is basically never worth it, especially when you can pay upwards of 17% more than the International Monetary Fund (IMF) exchange rate.

Basically, airport kiosks can and will charge extremely high rates because they know you’re a captive customer.

Tourist sites

Tourist sites are similar to airport kiosks in that they know you’re only using them because you didn’t sort out your foreign currency before you arrived. So they can charge you really high rates, leaving you spending a lot more in the long run.

Prepaid debit cards

Prepaid debit cards are another example of so-called convenience not being worth it. These cards often continue to charge foreign transaction fees (making them little better than just using an ordinary debit card) and can have high fees and/or a bad exchange rate.

Tips to reduce currency exchange fees

If you want to reduce the fees you pay when you exchange currency, then think about following some of these tips:

Pay in the local currency where possible

Paying in the local currency is almost always the best option, because you’ll avoid the high conversion rates you’ll incur when paying in your home country’s currency.

This is true when drawing out money from an ATM too – when prompted, always select the option to pay in the local currency.

Exchange in advance of leaving

Get your currency exchanged well in advance of leaving, because this way you can plan your spending and don’t have to just use the nearest exchange option.

Also, no one can ever really tell when a currency will become stronger or weaker, so there’s little point in trying to wait for the perfect rate.

Don’t change more than you need

If you change more than you need, you run the risk of paying more in fees than you need to, and then more fees when you change it back again. So try to work out how much cash you’re likely to need, and what sort of buffer you want to have.

Consider a travel credit card

Specialist travel credit cards can be a great option, as you’ll usually get highly accurate exchange rates worldwide. Ordinary credit cards often charge a fee per withdrawal or transaction. This can really start to add up when you’re regularly using a credit card for spending overseas.

Next steps

There you have it, our top tips on where to exchange currency without paying high fees! To summarise:

• Use an online currency converter such as Wise for day-to-day transactions
• Use an online currency exchange broker for larger, more complex transactions
• Avoid so-called convenient options such as airport kiosks and prepaid debit cards
• Pay in the local currency (don’t convert to your home currency)
• Exchange currency in advance of leaving

We hope this guide helps you make informed decisions on exchanging currency before your exciting move abroad.