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International Exchange Rates: Comparison of Where to Exchange Currency

In my book, Business Travel Success, I discuss exchange rates when traveling internationally. The book mentions that the worst international exchange rates are usually at airport kiosks. However, due to space limitations I was unable to include an example. Here’s a good example for the benefit of my readers.

On a recent trip to Hong Kong, I checked out international rates at various venues. At that time, the market rate to exchange a U.S. dollar into a Hong Kong dollar was $7.76 (rounded to two decimals).

My inquiries began at a Detroit airport kiosk. The exchange rate here was only 6.90 Hong Kong dollars for each U.S. dollar. In addition, there was a $10.00 fee for the exchange. Using an example of $100USD exchanged for Hong Kong dollars, you would receive a most disappointing $621HKD ($100 – $10 x 6.90).

As mentioned in the book, airport kiosks tend to offer the lowest exchange rates. That certainly proved true on this trip. At the Hong Kong airport, the exchange rate was a bit higher at 7.18 with no additional fees. Another disappointing rate but nevertheless better to exchange your dollars at the destination city airport than at the airport before you leave the U.S.

Once in the foreign city, many hotels also offer an exchange option. For example, my hotel had an exchange rate of 7.30 with no fees. Clearly it is best to exchange only as much U.S. currency at the airport as you need to get into the city, then find a better source. TIP: Even though my hotel was part of a chain, each hotel within this chain sets their own rate.

It was surprising to learn that the currency exchange kiosks on the streets of Hong Kong were better still at 7.50, and again there were no additional fees. Simply give them one USD, they will give you 7.50HKD. Of course, not all foreign cities have street kiosks but they may be a very good option when available.

How about ATM’s in foreign cities? Some allow you to enter into the machine the amount of U.S. dollars to exchange while others only allow the amount of foreign currency desired. The latter, typical in Hong Kong, requires some understanding of the exchange rate. There are many free helpful apps out there for those who have smartphones or tablets.

Using my credit card, I requested $700HKD because the ATM required multiples of 100’s. Then I had to wait to see the amount of credit card charges. A few days later they posted, and they were not good. First they charged my account $90.23 for the currency exchange. Then they added $2.70 for a foreign transaction fee, approximately 3%. And then they charged another $10.00 for what they called a “transaction fee.”

The exchange rate was very good at 7.76. Unfortunately they added those nasty fees so the effective exchange rate was only 6.80, a rate lower than all the others except the U.S. airport kiosk.

Note that ATM exchange rates and fees may vary greatly depending on your U.S. account or credit/debit card used. Since these fees changes frequently, it is best to check online for a source if you are looking for a bank that will minimize your international costs.

As expected, the best exchange rate I received was at Hong Kong banks with most offering 7.73HKD for each U.S. dollar. Well, that is the rate if you have an account at their bank. Of course, most people don’t have accounts at foreign banks so how much is their exchange fee? They varied from $50-100HKD. This yields a wide range of return from 773 (with account) to 723 (smaller fee) to 673 (higher fee).

Citibank is somewhat popular in Hong Kong, but don’t expect any great deal if you have a U.S. Citibank account or credit card. Their conversion rate was only $7.70 with a $50HKD fee. This fee is waived if you have a U.S. Citibank Gold account or card but the rate is still lower than other banks.

Another thing in Hong Kong that may apply in other places: If you will be receiving more than $8,000HKD (converting a little more than $1,000US), you must present your passport. Other countries may have similar rules so it is best to learn them before doing an exchange.

Most of these fees are based on the transaction, not dependent on the dollar conversion amount. Very simply, the fee is spread over the amount of U.S. dollars exchanged so the greater the amount exchanged, the better the rate. For example, banks in Hong Kong offer better rates than the city kiosks if you are exchanging approximately $300US or so. This is why it is best to ask before committing a lot of money to be converted.

Here are a few examples to show the effective exchange rate difference –

$100US $500US $1,000US
Home airport kiosk 6.21 6.76 6.83
Foreign city airport kiosk 7.18 7.18 7.18
Foreign city hotel 7.30 7.30 7.30
Foreign city street kiosk 7.50 7.50 7.50
Foreign city ATM 6.80 7.39 7.46
Foreign city bank (avg of fees) 6.98 7.58 7.65
Foreign city bank (no fees) 7.73 7.73 7.73


Is there really that much difference between the lowest exchange rates and the highest? Well, you can do the math yourself but in this example, the difference is almost 25%. For an expensive city like Hong Kong, an extra 25% — or even an extra 15% — is very much appreciated.

There is one big difference between using an ATM vs all the others – All of them require you to carry cash, except the ATM option. This can be an important consideration for some. Even though the exchange rate may not be as good, the peace of mind when traveling to another nation may be enough to offset the worry about carrying around a substantial amount of cash.

Most travelers heading outside North American get there by flying, though cruising is certainly a possibility. For those who fly, always keep your cash and other valuables either on your person or, if necessary, in your carry-on bag stored by your feet. Never place something this valuable in a bag in the overhead compartment. If the money is missing, it is very unlikely you will be reimbursed by the airline.

By the way, the exchange rate to transfer your foreign dollars back into U.S. dollars is always less than what you received originally. Again, generally best to do this at a foreign source when you are ready to return to the U.S. to maximize your dollars.

And of course if you plan to return to the same foreign land – or even another country that uses the same currency – consider holding on to what you already exchanged. This will save you a couple more transaction fees.

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