MileValue is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as CreditCards.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.

Note: Some of the offers mentioned below may have changed or are no longer be available. You can view current offers here.


I first came to Colombia 11 months ago, and $1 equaled about 2,000 pesos. Now $1 equals about 3,000 pesos. Since inflation has been low in the period, everything is about a third cheaper for me.

In the international baggage claim at Bogota’s airport, I saw a money exchange. As everyone should know, money exchangers make their profits from the difference between the prices at which they buy and sell currencies. Airport money exchangers usually have a huge spread between the two. Suckers change their moneys at airports. Pros use no-fee-worldwide ATM cards to get cash out at a much better exchange rate or a no-foreign-transcaction-fee credit card..

In the past, when free cellular data wasn’t so widely available, I would occasionally arrive in a country without knowing the fair exchange rate. In those cases, I would decide whether to use a money changer based on its posted buy/sell prices. In a developing country, the spread might be as little as 1% (I saw 0.3% spreads this summer in Serbia for exchanging euros), and in a rich country, the spread might be 3%.

Getting back to the Bogota airport, the spread was a hefty 9+% as the offers were 2,600 pesos for a dollar and 2,800 pesos to buy a dollar. But the scam was that they almost certainly wouldn’t have given you a dollar for 2,800 pesos as a dollar is currently worth 3,076 pesos. If I had had more than 75,000 pesos in my pocket, I would have tried to buy all the dollars they had for 2,800 pesos each. I’ll bet you a lot more than 2,800 pesos that I would have been turned away.

Bottom Line

If for some reason you can’t get free data from T-Mobile, and you’ve forgotten to look up the exchange rate before entering a country, just checking a money changer’s spread is usually a good plan. However some exchange houses that know that they will only get customers on one side of the transaction may post fake prices on the other side of the transaction. Caveat exchanger.

 

Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.

Just getting started in the world of points and miles? The Chase Sapphire Preferred is the best card for you to start with.

With a bonus of 60,000 points after $4,000 spend in the first 3 months, 5x points on travel booked through the Chase Travel Portal and 3x points on restaurants, streaming services, and online groceries (excluding Target, Walmart, and wholesale clubs), this card truly cannot be beat for getting started!


Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are the author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

The comments section below is not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all questions are answered.