How to Exchange Foreign Currency at a Good Rate When Traveling Abroad (with a Comparison of Exchange Rates)

Sep 30, 2017, 5:02 AM

about18mins to read

When traveling abroad, you need to obtain local currency somehow.

In developed tourist cities, many shops accept credit cards, but it's a good idea to have some cash on hand, especially for tips or in case your card doesn't work.

There are various methods to exchange currency, and not knowing about them can result in significant losses. Here, we will summarize the methods.

In conclusion, "For USD and EUR, use Money Partners, and for minor currencies, use Interbank. For small amounts, credit card payments are convenient."

Methods to Exchange Foreign Currency

Let's list the methods to exchange currency. They can be broadly categorized as follows:

Airport Exchange Counters

Many people think of these first (e.g., Travelex).
Since they are located at airports, you can exchange currency immediately after arrival, making them very convenient.
However, the exchange rate is not favorable.

○ High convenience
○ Immediate availability
✘ Poor exchange rate

Exchange Counters in Town (Banks)

Next, there are exchange counters in town, often located in tourist areas or operated by major banks (e.g., UFJ or Mitsui Sumitomo).
Compared to airport exchange counters, these offer better exchange rates, but still not the best.

○ Moderate convenience
○ Immediate availability
✘ Somewhat poor exchange rate

Specialized Exchange Companies (Home Delivery)

There are companies that specialize in currency exchange, and they often offer home delivery services.
Although it takes some time, the exchange rate is relatively good.

○ Relatively good exchange rate ( some companies offer very good rates )
○ No need to carry cash to the exchange counter ( home delivery )
✘ Time-consuming
✘ Slightly suspicious
✘ Home delivery incurs a commission

I have used Interbank, a company with a strong name.
They have a store in Akihabara, where I can receive the currency directly.

Using Money Partners

Money Partners, an FX company, offers a service that allows you to exchange currency at a nearly optimal rate.
You can receive the exchanged currency at the airport (Narita, Haneda, Kansai, or Chubu).

https://www.moneypartners.co.jp/

As of 2017, Money Partners is the only FX service that offers realistic prices for foreign currency exchange.
For details, please see the airport foreign currency reception service.

○ Nearly optimal exchange rate
○ No need to carry cash to the exchange counter
○ Convenient airport reception
✘ Requires a Money Partners account
✘ Need to apply 1-2 weeks in advance
✘ Limited supported currencies
✘ 500 yen commission (may not be worth it for small amounts)

Credit Card Payments

This is also a convenient method of exchange.

The exchange rate is relatively good, and you can earn points.

○ Pay only what you need
○ Relatively good exchange rate
○ Earn points
✘ May not be usable in some situations
✘ Exchange rate may vary depending on the billing cycle
✘ Unclear how much you will be charged

Overseas Cash Advance

This is a credit card function that allows you to withdraw cash abroad.

Although it may seem scary, overseas cash advance is a method worth considering, as it offers a relatively good exchange rate.
However, there are other costs involved, such as interest and ATM fees.

Interest on borrowed money
ATM fees

The interest rate is high, around 15% per year, but if you use the early repayment system, you can minimize the loss.
Additionally, there is a 500 yen ATM fee, which can add up if you withdraw cash frequently.

○ Get the necessary cash locally
○ Relatively good exchange rate considering interest
✘ Need to apply for the card in advance
✘ High interest rate if not repaid promptly
✘ 500 yen ATM fee per withdrawal

What's the Best Method?

Finally, let's compare the methods.

Comparison Results

Here are the results.
For clarity, we will show how much foreign currency you can get for 30,000 yen.

The US dollar is a major currency, so the exchange rates are relatively close.
However, the Canadian dollar has a significant rate difference due to its lower trading volume.

JPY to USD

	Reception	USDJPY	Commission	30,000 JPY → USD
Travelex	In-store	115.27〜	0	〜260.25
Mitsui Sumitomo	In-store	115.50	0	259.74
Mitsui Sumitomo	Home delivery	115.74	600	254.02
Mitsubishi Tokyo UFJ	In-store	115.53	0	259.67
Credit Card		114.59	0	261.80
Interbank	In-store	112.98	0	265.53
Interbank	Home delivery	112.98	500	261.11
Money Partners	Airport	112.70	500	261.76
Cash Advance		114.44	500	257.78

Interbank's in-store reception is the best method.

For a small amount like 30,000 yen, the 500 yen commission has a significant impact on the result.
If you want to receive the currency at the airport or by home delivery, Interbank or Money Partners are good options.

JPY to CAD

	Reception	CADJPY	Commission	30,000 JPY → CAD
Travelex	In-store	99.19〜	0	〜302.45
Mitsui Sumitomo	In-store	〜101.28	0	296.21〜
Mitsui Sumitomo	Home delivery	101.28	600	290.28
Mitsubishi Tokyo UFJ	In-store	99.29	0	302.15
Credit Card		92.31	0	325.00
Interbank	In-store	90.98	0	329.74
Interbank	Home delivery	90.98	500	324.25
Money Partners	Airport	-	500	-
Cash Advance		92.19	500	320.00

Interbank's in-store reception is also the best method for CAD.

The exchange rate difference between stores is significant for CADJPY, and Money Partners does not support CAD.

Details of Each Exchange Method

Here are the details.

Exchange Counters

We checked the rates at Travelex, the most well-known exchange counter.
However, this is an online rate, and the in-store rate may be higher.

USDJPY: 115.27〜
CADJPY: 99.19〜

Banks

We checked the rates at Mitsui Sumitomo Bank's in-store counter.
According to their website, the USDJPY rate is +3 yen higher.
The CADJPY rate is unknown, but it's likely to be slightly lower than the home delivery rate.

USDJPY: 115.50〜
CADJPY: 〜101.28

Mitsui Sumitomo Bank also offers home delivery.
The rate is slightly higher than the in-store rate, and there is a 600 yen commission for amounts under 80,000 yen.

USDJPY: 115.74
CADJPY: 101.28

We also checked the rates at Mitsubishi Tokyo UFJ Bank.

USDJPY: 115.53
CADJPY: 99.29

Credit Cards

We used Visa as an example.
The exchange rate can be calculated using Visa's tool.

Enter "bank fee" as 1.63% to get the rate used by the card company.

USDJPY: 114.59
CADJPY: 92.31

The exchange rate is relatively good, and you can earn points.
It's a convenient method, but the exchange rate may vary depending on the billing cycle.

Interbank

https://www.interbank.co.jp/

USDJPY: 112.98
CADJPY: 90.98

The exchange rate is extremely good, and there is no commission for in-store reception.
For home delivery, there is a 500 yen commission.

Money Partners (Airport Reception)

The exchange rate is +20 pips, or 20 yen, higher than the market rate.

USDJPY: 112.70
CADJPY: - (not supported)

This method is also extremely good, and you can receive the currency at the airport.
However, there is a 500 yen commission for airport reception.

Overseas Cash Advance

We used Visa as an example.
The exchange rate can be calculated using Visa's tool.

Enter "bank fee" as 0% to get the rate without the commission.

USDJPY: 112.748725
CADJPY: 90.829400

The exchange rate is nearly the same as Money Partners.
However, there is a high interest rate, around 15% per year, and a 500 yen ATM fee.

Summary

When traveling abroad, it's best to use a combination of methods.
For a small amount like 30,000 yen, using Interbank's in-store reception or Money Partners' airport reception for the necessary amount, and credit card payments for the rest, is the most convenient and cost-effective method.

Credit card payments are also convenient and earn points, making them a good choice.
Although they may not be the cheapest option, they are practically the best due to their convenience.