January 16, 2013 | In: General

Why It’s Better to Pay with a Credit Card Rather than Cash at Airports

I was at Heathrow yesterday in a connecting flight. I was hungry so I decided to have lunch. I elected to go with the same lunch I had nearly a month ago at the same place. The total bill was for £14 (including tip). I gave the waitress $25 (I’m talking US $) in cash as I was stepping out, telling her that this should be more enough (thinking that I overtipped). But, the waitress told me she wanted to check whether this is enough or not. I waited for a couple of minutes and then she told me: “you still owe us 20 cents”. So I had to give her another dollar. I then told her that according to my calculations, I overtipped her for an extra $2.6 because I had the same lunch for the same price a month ago, paid by credit card, and I got charged for $22.40 (they calculated the rate at $1.6). Sure the foreign exchange rate might fluctuate in a month, but not that much! She told me that the forex rate in shops at the airport is much higher than the normal rate, and they often charge an extra 10-15% on top of the normal rate. Their rate was 1.8 (e.g. 1 pound equals $1.8).

I was personally under the impression that it’s better to pay in cash than in credit cards at airports, because Visa (and MasterCard) charge people an extra 1% over the bank rate. Apparently, I was wrong, because I didn’t know that shops charge 10-15% over the normal rate.

Stick with using your credit card at the airport – it’s always the lesser of the two evils. Unless, of course, the cash you have on hand is in that airport’s currency.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

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