As we all know, exchanging currency is necessary for most trips outside the United States, and there are a variety of ways to convert U.S. dollars into the currency used in your destination. Banks, credit card companies, credit unions and the currency-exchange companies that typically operate out of airports and train stations all offer currency conversion services at varying rates and with different fees. But which one has the best deal? It’s commonly said that credit cards are the best way to save on currency conversion, but is that true? And if it is, how much can consumers expect to save using a no foreign transaction fee credit card?
In order to find out, Card Hub conducted a study whereby we both analyzed online rates and anonymously called the nation’s largest consumer banks as well as Visa, MasterCard and one of the Travelex locations in the John F. Kennedy Airport (Travelex is the world’s largest currency exchange operator). Both for uniformity sake and because the Euro is the most prevalent foreign currency, we gathered information about the U.S. Dollar-to-Euro exchange rate as of June 28, 2011. In other words, we determined the dollar amount needed to buy one Euro from each of the companies polled. Please find the results of this study below:
Credit Card Networks (for credit card usage)
| Credit Card Network | Exchange Rate | Fee |
| Visa | 1.4237 | 0-3% depending on your credit card |
| MasterCard | 1.4345 | 0-3% depending on your credit card |
| Average: | 1.4291 | N/A |
Based on today’s rates, one can expect to get one Euro for every 1.4291 dollars when using a no international fee credit card.
15 of the Nation’s Largest Banks (for converting cash)
| Bank | Exchange Rate | Fee | % Higher Than Credit Card* |
| Bank of America | 1.5021 | $7.50 | 7.2 |
| Chase | 1.5111 | None | 5.4 |
| Citibank | 1.5168 | $5 | 7.3 |
| Wells Fargo | 1.5037 | $12 | 8.8 |
| HSBC | 1.4900 | $11 | 7.6 |
| U.S. Bank | 1.6100 | $9.95 | 14.2 |
| PNC | 1.5289 | None | 6.5 |
| Capital One | 1.5311 | None | 6.7 |
| TD Bank | 1.5239 | $7.50 | 8.6 |
| SunTrust | 1.5160 | $10 | 8.9 |
| BB&T | 1.5140 | $10 | 8.8 |
| Harris Bank | 1.4964 | None | 4.5 |
| Fifth Third Bank | 1.5454 | $10 | 10.6 |
| KeyBank | 1.5160 | $10 | 8.9 |
| Northern Trust | 1.4881 | None | 4.0 |
| Average: | 1.5196 | $6.20 | 7.9 |
*Based on a $300 conversion and use of a no international fee credit card
Airport Services (for converting cash)
| Airport Service | Exchange Rate | Fee | % Higher Than Credit Card* |
| Travelex | 1.6200 | $9.95 | 14.7 |
*Based on a $300 conversion and use of a no international fee credit card
Conclusions
Without a doubt, Visa and MasterCard provide the best exchange rates between the U.S. Dollar and the Euro, with Visa being slightly better as of 6/28. On average, credit cards save consumers 7.9% relative to bank conversion services and 14.7% relative to companies found in airports. In order to save the most money, customers should use a no international fee credit card and avoid dynamic currency conversion. However, even if a consumer was to use a credit card with a 3% foreign exchange fee — the highest currently found in the market– they would still be saving 4.9% and 11.7% relative to banks and airport currency exchange services respectively.
Banks, on the whole, also outperform the airport services, which many consumers opt for out of convenience and/or necessity. However, the services offered by the banks are certainly not equal, as the rates (including any fees) offered by the best and the worst banks differ by 11.9%. The banks that offer the best rates are Northern Trust and Harris Bank. The banks offering the worst rates are U.S. Bank, which has a 1.61 conversion rate and a $9.95 fee, and Cincinnati, Ohio-based Fifth Third Bank, which has a 1.5454 conversion rate and a $10 fee.
