The main concern we have with Travelex is how much it charges to exchange travel money. You could end up paying around nine percent of the total amount you’re converting in exchange rate fees, which is not great. This means if you’re exchanging $1,000 for travel to another country, you could pay up to $90 in hidden charges. It’s a bit of a rip-off!
Let’s look at a few examples.
Exchanging US dollars to euros
If you’re traveling to Europe, you’ll want to convert USD to EUR. Here’s how Travelex stacks up.
The base, midmarket exchange rate* is 1 USD to 0.909 EUR.
The Travelex website offers a rate of 1 USD to 0.829 EUR.
Exchange 500 USD to EUR
If you’re exchanging 500 USD, you would get 414.75 EUR with Travelex, compared to 454.50 at the base exchange rate. That’s about $44 more expensive, around 9 percent of the dollars you’re converting.
Exchange 2,000 USD to EUR
If you’re exchanging 2,000 USD, you would get 1,659 EUR with Travelex, compared to 1817.20 EUR at the base exchange rate. That’s about $175 more expensive, around 9 percent of the dollars you’re converting.
Exchanging US dollars to British pounds
If you’re visiting the UK, you will need to convert USD to GBP. Here’s what it could cost.
The base, midmarket exchange rate* is 1 USD to 0.805 GBP.
The Travelex website offers a rate of 1 USD to 0.725 GBP.
Exchange 500 USD to GBP
If you’re exchanging 500 USD, you would get 367.55 GBP with Travelex, compared to 402.68 at the base exchange rate. That’s about $43 more expensive, around 9 percent of the dollars you’re converting.
Exchange 2,000 USD to GBP
If you’re exchanging 2,000 USD, you would get 1,470.20 GBP with Travelex, compared to 1,610.73 GBP at the base exchange rate. That’s about $174 more expensive, around 9 percent of the dollars you’re converting.
Unfortunately, these hidden charges are similar across many currencies including Australian dollars (AUD), Japanese yen (JPY), New Zealand dollars (NZD)and others.
*The midmarket exchange rate is the rate that banks and other financial institutions use to transfer money between themselves. Although it’s unlikely you would get this rate yourself, it’s a useful way to compare exchange rate fees, with many providers charging much lower fees than Travelex.
You can definitely get better exchange rates elsewhere.
