A friend of mine would like to give her sister $100 US to spend over Xmas in London. The sister lives in New York, but will be spending the holiday in London. My friend, being a sweet big sister, and knowing l’il Sis ain’t too good with such things, wants to make it easier on her by giving the gift in the best transaction possible.
Should she have the money converted at her US bank, and give her Euros, or give her US dollars to be converted in London? Any advantage either way?
Well if her sister lived in London, I doubt she’d want Euros as the currency in the UK is still pounds. I don’t think there is a real advantage in giving the money in pounds or dollars, AFAIK the commision taken by bureau de changes are about the the same in the UK and US.
If it’s easier for your friend to change the money than it is for her sister then it’s best to get her to do it (if she transfers it directly into her bank account, the bank will change the dollars to pounds for her).
There is a bit of a loss in converting U.S. dollars to pounds (or Euros, etc.) in the the U.S. before leaving. But I do it a little (meaning I take some foreign currency to just get through a day) for convenience and slight paranoia (such as, what if the ATMs are not working when I get to my destination). American Express is one of many companies that will exchange currency for you. One site on conversion rates: http://www.oanda.com/converter/travel
Bank transfer is pro’ally the easiest way to do it but if that doesn’t work out, how bout a traveler’s check? Nice and easy and no big deal if absent minded little sister misplaces it. They’re easy enough to cash and in most major cities there’s an AmEx office or two that will wave the usual surcharge for cashing in.
Often the best rates are on credit card transactions. If your friend just gives her sister the cash in US$, and the sister then spends that money on her card in London, the c/c company will then convert her purchases and bill her in US$, which she can pay with your friend’s cash.