Money Changing Tips

How to exchange your dollars for pounds at the best rates (and lowest fees) possible

First things first: How much is a British pound worth?

The daily rate fluctuates, obviously, generally ranging between 75 and 80p to the dollar, and $1.19 to $1.28 to the pound. (Brexit negotiations will likely make the pound less stable and more prone to fluctuations for the foreseeable future.)

OK, now on to how to get your hands on some pounds.

How to change money in the U.K.

Always exchange money at a bank, and always use your ATM card to withdrawal pounds from your home bank account. This is how you will get the best rates and pay the lowest fees or commissions.

If you’re in a pinch and need to exchange dollars or traveler’s checks from your emergency stash, again: do it at a bank, and read the information below to ensure you get the best deal.

Businesses emblazoned with “Exchange! Cambio! Wechsel! Change!” are exchange booths, and all of them—from venerable Thomas Cooke offices all the way down to the shady guy who hangs around the bus station—offer a worse rate and/or higher commission than banks and should only be used in emergencies.

That’s really all you need to know. If you want to know why this is the best advice, dust of your math hat and continue to read on for some dry, but important, technical stuff about exchange rates and commissions. (For more on rates—which is even more boring than the commissions stuff we’re about to discuss—

Demystifying Exchange Rates

The pound has historically been quite a bit more valuable than that (over the past few decades, on the order of 1.7 to 1.9), but the Brexit vote in summer 2016 severely dented the nation’s currency rating.

Now all those numbers represent the official interbank rate, which is what most newspapers print in their business sections. However, this only represents how much it costs banks to exchange money with each other—and it’s a rather better rate than you’ll ever get.

Other papers, especially in travel sections, print the rate (2% to 4% below the interbank rate) you’re likely to receive when exchanging money. When you exchange cash or a traveler’s check, you generally get a rate that is 4% “worse” than the interbank rate. This is known as “+4%.” It is also known as a “rip-off.” If you exchange at any agency besides a bank, you’ll probably do even worse.

On top of this, any place will charge you a commission—either a flat fee (in which case changing a lot of money at once is cheaper) or a percentage of the total changed (in which case you’re bleeding needlessly no matter how much or little you change).

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