Exchange rates
While planning your study abroad experience, pay special attention to the
exchange rates. Political and social events in Europe, as well as the
recent trends in the stock markets heavily influence what kind of
exchange rate you get.
There are several websites that show the most
current exchange rates. X-rates.com
has up to date rates, most importantly for the Euro and British Pound.
Also be sure to check exchange rates for when you travel to countries
that are not on the Euro so that you know how much you are spending.
When going to exchange money at a Bureau de Change, as they are called
in London, they will have a board with rates that say, "We Buy,"
and "We Sell." We Buy displays the amount of money required to
purchase another currency. For example, if you were to exchange
American Dollars to British pounds at a rate of $1.75, it means that it
will cost you $1.75 to purchase £1. We Sell generally is an
amount less than that, stating how much it will cost to purchase back
that same currency you had exchanged. Again, for example, you are at
the same Bureau de Change, and want to purchase American dollars with
British pounds, and the rate is $1.65. That means for every pound you
give them, you will receive back $1.65. Yes indeed, there is a
difference, and that is how Bureau de Changes make a profit. They also
make a profit by imposing a commission on the amount of money you want
to exchange, usually some small percentage that can add up fast
depending on how much you want to exchange.
Another rule of thumb to follow is how to calculate what the true
exchange rate is when looking at a sign board at a Bureau de Change.
Calculate the difference between the two rates that you see, and add
that difference to the We Sell rate. This will tell you what the true
exchange rate is. In our example, the true exchange rate would be £1 = $1.70. As a warning, the greater the difference between the
We Buy and We Sell rates, the more you are getting ripped off. We don't
recommend using Bureau de Changes, as they will cost you a lot of money
over the course of the term, money that can be spent on other more
important or fun things.
ATMs
ATMs are the best way to get money. They are fast, safe,
and give you the best and most recent rate, and are literally
everywhere. Another advantage to using ATMs is that in Europe, none of
them charge you to use that particular ATM the way most do in the
States if you're not a member of that bank. Your home bank may charge
you an extra fee, but check with them first to see what your policy is.
Also be sure to alert your bank that you are traveling abroad for an
extended period of time. People who do not inform their bank before
traveling may have troubles after the first couple of days getting
money from an ATM, or have their account frozen, because their bank will
think their debit or credit card was stolen. We recommend using ATMs as
often as possible to ensure you are getting the most recent rate and to
avoid commissions and fees at Bureau de Changes. It is the best way to
go.
Credit Cards
We recommend having both a debit card and a credit card, to ensure that
if one gets lost or stolen, you will still have the other available. It is best to use a debit card so
that you only access money that you actually have. It's never a good
idea to have a large credit card bill, and it can get really big really
fast if you are not careful. But nonetheless, its good to have multiple
options for getting cash. Another good idea is to keep your debit card
and your credit card seperate, so that if your purse or wallet is
stolen, you still have the other available to you. Also make sure that
the back of your credit card is signed. Sales clerks regularly check
signatures to ensure that they match.
Traveler's Checks
Traveler's Checks can be a good source for money, but
when abroad, you will have to convert the traveler's checks before
using them. Therefore, you will be subject to the fees of the Bureau de
Change, as well as whatever exchange rate they set. They are best used
only as a back up option to debit and credit cards.
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