This summer I return to Lithuania for the second time in as many years (and will be back again next summer), so part of my trip preparation has been stressing over how to most economically turn my dollars into litai. This research is using a trip to Lithuania as a specific baseline, but I think it would demonstrate the sort of research necessary for future use for any trips abroad.
For traveling abroad, I count up 4 ways of spending money:
1. Riding your ATM or credit card.
2. Bringing USD to the other country and converting there.
3. Converting to the other currency in the US.
4. Opening up a bank account in the foreign country, and going from there.
At first glance, it seems like these are ordered from “most wasteful” to “least wasteful.” What I’ve found out, however, is that it’s not quite so simple. But before moving on, I’m going to use two conversions from today:
And I’m going to assume that I’ll blow through $1000 over the course of the trip.
So another way of asking this question that this post answers, then, is, how can I turn $1000 into 2168.70 Lt (or more)?
1. ATMs and credit cards
Obviously your bank will vary (so call them for details!), but I use Citibank. I have a regular checking account, so every time I use an ATM abroad, I get a 2% fee tacked on. A gold account would have been 1%. Plus, the bank would not give me a conversion rate to litai over the phone. So considering the litas is pegged to the euro, I asked for the rate in euro. “1.6891,” the woman told me. So…
$1000 - 2% = $980
$980/1.6891 = €580.19
3.4528(€580.19) = 2003.28 Lt
Using your ATM card, then, loses you 165.42 Lt for every $1000 you spend. That’s just over $76, or 7.6% of the total.
The main bottlenecks here are, of course, the 2% fee and the intensely unfavorable exchange rate with the euro. I have no reason to suspect the rate with the litas would be more favorable, and the 3.4528 is, of course, the rate at which the litas was pegged to the euro.
Incidentally, between Chase, Bank of America, and WaMu, I was only able to find out a competing rate from one of them (online). Bank of America sells euro at 1.676. Not as terrible as Citibank, but still heavily influenced by massive drugs.
2. Converting in Lithuania
I was always told not to handle my conversions in this manner. The currency exchanges rob you, etc. It is probably true that an airport exchange will rob you blind between their fees and unfavorable rates. Banks, however, are a different story. Banks are also all over the place in central Vilnius, and exchanging a sum of cash every morning proved to be no big deal for me last summer. I went to Hansa bankas last year, but here I’ll try to make a matrix for three banks in Lithuania.
(Part of how you know that this is an intelligent way of exchanging money is that these banks typically list the exchange rates right on the front of their websites. Citibank does no such thing.)
Hansa buys dollars at 2.1551. Their fee is 1 Lt for transactions under 400 Lt
Snoras buys dollars at 2.153, and transactions “shall include the fee not larger than the fee for exchange operations set by the Bank of Lithuania.”
Finally, DnB NORD buys dollars at 2.1500 and charges a fee of 1 Lt.
As you can see, they all have very similar exchange rates, and I imagine the Snoras fee is around 1 Lt. So since I’m partial to Hansa bank (and they have the best rate), let’s calculate using it:
(2.1551)$1000 = 2155.10 Lt
Here you lose 13.6 Lt per $1000 spent, or $6.27. That’s just over .6%.
3. Converting in the US
To me, this seemed like the brilliant thing to do. So brilliant, in fact, that it’s precisely what I did do last month in preparation. Citibank offers a service called World Wallet.
They take money from your account and give you currency. That way you can land in a foreign country with money in hand, ready to go. Exchanging less than $1000 lands one a $5 fee (I thought it was higher, but I was probably wrong). But what’s the rate? I called 1-800-756-7050 and was quoted the same exact rate as for ATM purchases. Further, the phone looked at me funny when I asked about the litas, so we’ll use the euro as the baseline again.
$1000/1.6891 = €592.03
3.4528(€592.03) = 2044.16 Lt
The loss is 124.53 Lt for every $1000 spent, or over $57. That’s a 5.7% loss. That percentage is better than using the ATM, of course, but that’s because it doesn’t include the 2% ATM fee.
I’m not going to lie. This absolutely floored me when I found this out. Furthermore, because the conversion was done to euro, not Litai, I lose even more money, because these euros I now have in my pocket need to be converted again.
Converting at Hansa, which buys at 3.442, makes my total litas count out to be 2037.76 Lt, so it’s closer to a 6% total loss.
My only saving grace is that I converted when the euro was at $1.67 (according to Citibank), so the euro in my pocket have gained in value since I put them in there.
4. Opening up an account
A glance at Hansa’s conversion table shows that there are favorable rates for transferring in money as a deposit, instead of as a cash operation. Hansa furthermore has no minimum balance or monthly fee associated with accounts with debit cards. I’m not entirely sure if I’ll be able to open an account with a US passport, however. But I plan on doing this when I arrive in Lithuania.
2.1562($1000) = 2156.20 Lt
This is a 12.5 Lt loss for every $1000 deposited, or $5.76. Notable is that it’s not even $1 saved against just converting the money in cash at the bank, so the opportunity cost of having to open an account, wait for the debit card, etc., may not make this a worthwhile investment.
Having a Lithuanian bank account, however, will permit you to top-up your Labas cell phone online while you’re not in Lithuania to keep the number alive. And though that’s not a huge thing, it’s not nothing.
Conclusion
Always go to Lithuania with as many US dollars as you feel comfortable bringing. Once you’re there, if you convert to Litai via cash or via a bank account at a Lithuanian bank is up to you–the bank account saves you not even $1 per $1000 in exchange versus cash, making the hassle of opening an account potentially not worth it. And though you’ll lose money emptying out the account back into dollars to bring back home (assuming you did not spend it all), the rate the bank will give you will still be in the vicinity of 2% off the real rate. That means that even still you lose less money converting from USD > LTL > USD at Hansa Bank than you do converting USD (> EUR) > LTL at Citibank in your neighborhood.
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