American Express currency exchange: Is it worth it?

Heading out of Australia? You’re probably going to need some foreign money, in that case. But you might not be entirely sure about the best way to get it. Should you exchange cash before you go, once you’re there, or at the airport? Should you use your credit or debit card abroad, or just withdraw money from a foreign ATM? What about specialist options, like travel cards or travelers’ checks? Or how about using a foreign currency account - or transferring money to a trusted friend in your destination country? There are so many options that it often feel best to go with a trusted brand. Which is why you may well be keen to use American Express.

One of the world’s top financial companies, AmEx is best known for its ubiquitous credit cards, used widely not just in the USA but throughout the world, including in Australia. And it’s long had a strong reputation for offering travel services.

But surprisingly, American Express doesn’t offer currency exchange services in Australia. As the article below will explain, it used to, but doesn’t anymore. Is it still possible to use American Express services when traveling abroad? Of course. But it’s not the service to use to exchange foreign currency.

Sending money to or from Australia? Wise could save you up to 8x versus your bank

Before you get started, a word.

Banks and money transfer providers often give you a bad exchange rate to make extra profits.

Wise is different. Its smart new technology skips hefty international transfer fees by connecting local bank accounts all around the world. Which means you can save up to 8x by using Wise rather than your bank when you send your money abroad.

Check out how to make your first transfer with Wise. And give it a try.

Oh, and while you’re at it, check out Wise’s borderless multi-currency account. Where you can manage and send dozens of currencies all from the same account.

Now, back to what you came here to read.

How does American Express money exchange work?

Travel is big business for American Express: they’re keen to help with every aspect of your trip, even including booking flights and hotels, and if you have an AmEx card it could be worth looking into how you can use it when traveling¹. And of course the company is well known for its travelers’ checks as well, even if that’s a bit of an old-fashioned option these days. But foreign exchange? Afraid not.

American Express in Australia used to have a service called FX4You, through which you could order foreign currency online and pick the cash up from locations around the country. However, the FX4You service is no longer available².

Another service American Express used to offer in Australia was the GlobalTravel Card: a prepaid card for traveling abroad. But unfortunately, that’s not currently available to new customers either, and nor can existing customers reload their cards at the moment³.

So if you remain keen to use the services of American Express when traveling abroad, you’ll have to use your card directly, or else some of the other products they offer, such as insurance¹.

If you still want to exchange some money before your trip, you’ll need to use another provider. When you do so, don’t forget to always check whatever exchange rate you’re offered against an online currency converter, which will give you the mid-market rate. Read on to find out why that’s such a big deal.

What are the fees for exchanging money with American Express?

The fees you’ll be charged will depend on exactly what service you’re using. If you have an AmEx card, do check the details for what happens when you use it abroad with a foreign currency.

If you head to an alternative currency exchange service, do look out for extra costs. And that doesn’t just include fixed fees - there’s something else to bear in mind, too.

In fact, even if you’re offered ‘no fee’, ‘zero commission’ or whatever other tempting proposition, there will almost certainly still be a cost to you. It’ll just be a hidden cost - hidden in the exchange rate...

What is the American Express exchange rate?

Of course, despite not offering currency exchange services in Australia, American Express is still involved with the exchange rate in various ways⁴. If you want to know what exchange rate American Express will offer you, looking online might mean you get stuck with a page about their business offerings. To find out what exchange rate you’ll end up with if you’re using an AmEx card abroad, you should contact them directly - although exchange rates fluctuate all the time, so it can be hard to get a precise answer.

There’s another general issue with exchange rates, though, which is not at all unique to American Express. It’s standard practice, in fact, for banks and other international finance services to offer an exchange rate to consumers that is raised above the real mid-market rate. Effectively, these companies add a markup to the mid-market rate, so that they’re able to keep a little bit more of your money.

The mid-market rate, by the way, is an average of the buy and sell rates currently in use - honestly, the only rate it’s really fair to use. But it’s not generally the rate on offer to consumers.

So whenever you’re exchanging money, whatever provider you’re using, do yourself a favor and whip out your phone, to compare the rate you’re being offered to the mid-market rate via a currency converter like Google, XE or Wise. You might be unpleasantly surprised at the result. But the realization could save you money.

If you want to be sure to get the real mid-market rate, with 100% clarity about additional costs, Wise could well be worth a look. You can use Wise to send money abroad at the mid-market rate, with only a clearly stated, low fee to pay. And if you often send or receive foreign money, a borderless multi currency account is even more useful: for no monthly fee at all, you can hold money in more than 40 international currencies, and use virtual bank details in US and Australian dollars, British pounds, and euros. So you can not only pay like a local in any of those currencies - you can get paid like one too.

Good luck with your currency exchange. Just make sure that when getting foreign cash, you get a good deal, whichever provider you use. It’s your money, after all - and your trip, too. So you don’t want to spend it fretting about exchange rates.

Sources:
1.https://travel.americanexpress.com.au/travel/arc.cfm
2.https://web.archive.org/web/20170701054204/https://www.fx4you.com/australia/americanexpress/?inav=au_sitefooter_buyforeigncurrency
3.https://www.americanexpress.com/australia/personal/travel/prepaid_travel_card/index.shtml?inav=au_sitefooter_prepaid
4.https://www.americanexpress.com/au/content/foreign-exchange/exchange-rates/
All sources have been checked on September 26, 2018

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.