Most tourists convert their currency to foreign currency and then spend it, not turn around and change it straight back to the original. I might well stand corrected but I don’t think anywhere will change currency A to currency B and then B back to the original A amount. I use the PO and their rates are competitive with banks (who usually charge commission unless you’re changing a suitcase full of money) and certainly better than the various change bureaux scattered around London.
That said, I’m not sure the OP is looking for best exchange rates or is concerned with convenience and such, but they should check with their bank in any case regarding charges and exchange rates.
It’s true that no sane person changes their money twice like that, but comparing a currency exchange’s “buy” and “sell” rates gives you an idea of their hidden commission rate: it will be about half the difference between the two rates, because they will be charging about the same commission in both directions.
In my experience, conversion rates and ATM fees tend to be larger than differences in raw foreign-exchange rates, so if you’re looking at a choice of places to change money, compare fees first. The booths at the Toronto airport seems to charge about 7%, for example.
Noting what Colophon said about London taxis, I’d just add that if you travel outside of that city, don’t assume you can pay cab fares by card. Sometimes it’s possible, sometimes not.
Once again not speaking from personal experience but on the basis of what I read on travel boards visited mostly by Americans :
It seems a number of American banks mislead their customers (deliberately or out of ignorance) regarding the exchange fee : for instance by stating that whatever fee was charged by the bank owning the ATM when actually banks in the relevant country are prevented by law from charging fees for the use of their ATMs, and the fee was actually charged by the American customer’s bank. Or the bank added a “conversion fee” of its own on top on the fee charged by Visa or Mastercard, that is they charge a fee for doing nothing, since the conversion has already been done by Visa.
Normally, Visa, etc… charge 1% or 2% (can’t remember) on top of the exchange rate. Honestly, you won’t get a better deal than that except if you’re yourself a bank. I believe (British posters will correct me if I’m wrong) that British banks do not add fees of their own when their ATMs are used (might not be the case for an ATM situated somewhere else than at a bank).
So, you normally should only pay this 1-2% fee when using an ATM in the UK. And no booth will beat that. BUT your own bank, once again according to American posters on travel boards, is going to add whatever fees it feels like adding for whatever reason (a %age, or a fixed amount per withdrawal, or a second conversion fee, etc…). So the advice given is to ask your bank first what it charges (knowing that some answers will be wrong in small branches) and compare with other banks that could charge much less for the same service. Only if your bank charges absurdly high fees would you end up paying more by using an ATM (or if you use a credit card and your withdrawal is considered a cash advance, henge generate interests. But once again, that’s a problem with your bank, not with using ATMs).
By the way, there’s a “scam”, that originated in the UK/ Ireland and is spreading in Europe regarding the use of your credit card to pay for services. The shop/restaurant owner “for your convenience” (and sometimes without asking) will hand you a bill/card receipt in US dollars (Canadian dollars, pesos, whatever).
Of course, it means that your payment will run through a private exchange company before being sent to VIsa/Mastercard. And of course, this company charges a fee. Some people apparently go as far as not only doing that without asking, but even refusing to let you make a regular payment (libelled in euros and sent directly to Visa’s network). So, make sure you’re not handed a bill or a receipt in dollars rather than in pounds or euros as you should. And refuse if you’re offered to benefit from this “convenience”.
As a general rule, British banks do not charge for the use of their ATMs, that’s true. But you’re also correct in noting that “non-bank” ATMs such as those found in some convenience stores do. They are supposed to tell you about any fees before you commit to the withdrawal, though.
I have an American bank account (with BoA, for my sins) and use it in the UK. I don’t generally have a problem getting my US debit card accepted, but BoA charges me $5 for a cash withdrawal and 1% of any transaction of any type conducted outside the US.
Also, some outlets don’t like the fact that my US debit card does not have “chip and PIN” technology. Most are OK and will let me sign a slip in the traditional way, but not all. Unlike in the US, the card must have a chip if you want to use it with a PIN keypad.