Currency Exchange: 0% to 15% in Fees (Manila Version)

Airport currency exchange is rip off! Avoid at all costs unless you want to pay a 15% ignorance tax.

I recently moved from NYC to Manila in the Philippines.  I didn’t plan ahead to convert my US Dollars (USD) into Philippine Pesos (PHP).  Apparently some US banks will do this for you if you are a customer.  I don’t know the fees on this service though, but I heard they are favorable.

Don’t convert your money at the airport (jfk airport for sure)

So I went up to counter at the JFK airport equipped with the knowledge that the rate of PHP to USD was about about 50.x to 1.  They wanted a $10 transaction fee and wanted to give me 43 to 1. I told them ?. Well maybe not in real life, but that’s over a 15% rate fee PLUS a $10 transaction fee.

To make matters worse, you’re probably gonna be left with change after you spend the foreign currency that you won’t be able to convert back because currency exchanges don’t take coins or have to pay another 15% to convert back!

Rate on July 19th 2017 was $50.81 according to Yahoo Finance

Use Your Credit Card (0% – 3% Fee):

I have a credit card with “no foreign transaction fees” and it is what it says it is.  When I make purchases here in PHP, I just get charged in USD.  But what rate do the credit card companies use?  Well, Visa and Mastercard provide tools for this and I did a lil comparison for 7/19/17

So Mastercard does give a slightly better rate than Visa, but both are close and within reason. If you don’t have a Credit Card with no foreign transaction fees, then you’re probably going to pay a 3% fee.  Still much better than 15% at the airport!

But I Need Cash!

In the Philippines there are plenty of times where I need PHP.  So I’d like to pimp out Charles Schwab Investor Checking.  I actually love this checking account as they reimburse all ATM fees worldwide.  So I can also just go to a Philippines ATM and withdraw PHP directly with no fee. (well there is a fee, but it gets reimbursed by Schwab)

If you happen to be in Bonifacio Global City, I found a currency exchange booth in Market Market that converted 50.3:1 when the reported rate was about 50.5:1 on 7/28/2017.  That’s a very reasonable rate of 0.4%.

Easy to confuse:

So my very intelligent girlfriend visited Canada a while back.  She knew of the foreign transaction fees on her credit cards so she naively exchanged USD for CAD at the airport to avoid the credit card fees.  I can only assume she paid $10 for the transaction, 15% rate fee, and she was left with about $12 she didn’t exchange back.  So out of her $200 exchange, $50 got wasted. When you receive just a fist full of cash of unknown currency, we just generally accept it as is.

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