Best Dollar Exchange Rate to Buy US Dollars in the UK: Insider Tips for Travel in 2023

Like the United Kingdom, the United States uses cashless payment systems and contactless cards. The US is famous for tipping, but even that can often be done with digital payment too.

This is why our Monito experts will explain why going digital is the best way to buy dollars in the UK before your holiday. You can say goodbye to traditional brick-and-mortar cash changers like the post office dollar exchange, Tesco, M&S, and Sainsbury's who advertise zero commissions but charge high hidden dollar exchange rate margins.

We will find that the cheapest options to buy foreign currency, such as Starling Bank, Revolut, and Wise, are also among the most convenient ones. And if you still want cash for that American cash-only diner, cash tips, small-town bus systems, and corner stores, then you can still use the multi-currency account cards we recommend at American ATMs cheaply.

How Do I Get the Best Dollar Exchange Rate While On My Trip?

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Many British travellers enjoy holding US dollars in cash while in the United Kingdom prior to their flight to the States. Many opt to exchange pounds for dollars at a high-street bank, online money changer, or bureaux de change, but these methods are actually neither the most cost-effective or most convenient ways to get dollars.

Spend With Cards, Not Cash

Credit and debit cards that charge no foreign transaction fees are by far the cheapest ways to spend while you travel. This is because the exchange rate that MasterCard or Visa applies to your card purchases is negligibly small — about 0.2% weaker than the real mid-market exchange rate.

In contrast, if you had spent cash dollars that were exchanged with the post office dollar exchange rate or the dollar exchange rate at Tesco, M&S, Travelex, or Sainsbury's, then you may have suffered from an exchange rate around 5% weaker than the real exchange rate.

Get Cash Dollars From ATMs in the US

By the same token, take out cash dollars at ATMs with a card that waives foreign transaction fees if you need cash. The minor inconvenience of paying $2 to $5 in ATM withdrawal fees is better than getting hit with hidden fees from UK money changers.

Here are a few UK debit cards that will lower the costs when you need to take out cash with ATMs in the USA:

Starling Bank

Starling Bank's debit card is an excellent choice for a travel card, not only because card payments are widely accepted across the United States. Starling Bank also waives all foreign ATM fees. You may still be charged by the local ATM provider, but at least Starling Bank will never hit you with its own fees for using ATMs abroad.

Monzo

Monzo's coral debit card charges zero foreign transaction fees. For international ATM withdrawals, Monzo gives you a free limit of £200 every 30 days but charges you 3.00% of the amount withdrawn after that.

The Best Way to Buy Dollars in the UK Before Your US Trip

Jarrod Suda

Using debit cards that offer no foreign transaction fees is a cost-effective way to spend abroad. However, if you want to actually hold US dollars, then Monito has found multi-currency cards to be far and away the best way to do so. You'll be able to save dollars in your online multi-currency account and access them with the corresponding debit card in the United States like any other local.

Buying dollars this way can even be done in the comfort of your home too. Wise and Revolut are among the best in their industry and are both available to customers in the United Kingdom.

How the Revolut Multi-Currency Card Works

The Revolut Multi-Currency Card offers multi-currency debit cards to customers when they sign up. Your card should be shipped to you for free within 7 business days, so plan this ahead of your trip if possible:

1. Link your UK bank account details to the multi-currency account;
2. Top up Pound sterling into the account online or by mobile app;
3. Convert your pounds into USD at an industry-low exchange rate margin;
4. Pay zero fees per conversion (within the fair use limits);
5. Use your card in the USA with no foreign fees.

Avoiding Fees When Buying Dollars in the UK

When you convert your pounds into a foreign currency, such as the dollar, foreign exchange service providers will charge you two kinds of fees:

1. Exchange Rate Margin: Providers apply an exchange rate that is poorer than the true "mid-market" exchange rate. They keep the difference, called an exchange rate margin.
2. Commission Fee: This fee is usually a percentage of the amount converted, which is charged for the service provided.

Even if you have a travel credit card with your British high-street bank that charges no foreign transaction fees, Visa and Mastercard's exchange rate does not perfectly match the mid-market rate. Each time you spend money abroad, you will not be spending as efficiently as if you were holding actual dollars.

This is why we recommend using multi-currency cards over high-street bank travel cards or currency exchange bureaus. Use multi-currency cards at point of sale at restaurants and other purchases. If you need cash, try to stay under their monthly free ATM withdrawal allowance.

Revolut

Revolut is an excellent choice for a multi-currency card because it also applies an industry-low dollar exchange rate, within the fair usage limits. However, it adds a markup on weekends. Commission-free conversions are limited to £1,000 for Standard and Plus plan customers. A 0.5% fee will be applied for the amount exceeding the limit. That allowance increases if you upgrade memberships.

Revolut allows you to withdraw up to $200 per month from ATMs without fees. After that, there will be a 2% fee per withdrawal.

Wise

Unlike banks, credit unions, airport kiosks, and foreign ATMs, Wise is transparent about never charging a hidden exchange rate margin when you convert your pounds into dollars (and 51 other currencies). The live rate you see on Google or XE.com is the one you get with Wise. An industry-low commission fee will range from 0.35% to 2.85%. GBP to USD transfers generally incur a 0.5% fee.

Wise allows you to withdraw $200 per month from ATMs. After that, they will charge 1.75% per cash withdrawal.

Compare Rates Online: Where Else to Get USD Exchange in the UK

While getting dollars in cash is cheapest if you use your debit card at an ATM in the USA or if you open a multi-currency account, you still have several options to get dollars in the UK before your trip.

Jarrod Suda

1. Money Transfer Services

If you prefer cash pickup and cash delivery, then have a look at Small World and Western Union. They both ranked as the top two cheapest options for GBP to USD exchanges from November 2021 to November 2022, according to Monito's comparison engine.

While you will have to pay a premium for cash pick-up and cash delivery, these international money transfer services will allow you to hold physical dollars before your trip. In any case, these specialists will almost always be cheaper than converting currency at a high-street bank, Tesco, the Post Office, or an airport bureaux de change:

Small World

Western Union

2. Exchange Rate For USD With a High-Street Bank or the Post Office

Despite commonly heard advice, the post office and the high street have become outdated money transfer providers. New companies are offering innovative ways to obtain foreign money cheaply and digitally.

We found that UK Post Office was converting £1 GBP into $1.12 USD even though the mid-market exchange rate was at £1 GBP = $1.15 USD*. That's 2.608% weaker than the mid-market.

*Exchange rates recorded on 2 November 2022 10:00 CEST.

3. Airport Bureaux de Change

Bureaux de change at airports in the United Kingdom is convenient for last-second exchanges before you head off on your travels. They charge huge exchange rate margins and hefty commission fees. We've seen margins exceeding 10%. Airport kiosks should be avoided at all costs.

If you need dollars in cash for your travels, Monito recommends that you withdraw cash from an ATM in the USA with a card that charges zero foreign transaction fees. The exchange rate margins will almost certainly be smaller, and the cash withdrawal fee charged by the ATM should amount to a minor inconvenience of $2 to $5.

How To Order Dollars Online for Delivery in the UK

The multi-currency account offered by Revolut remains the best way to convert your Pound sterling into US dollars and hold dollars digitally for your travels.

However, traditional foreign exchange services do run online platforms, which you may use to purchase dollars. These Small World and Western Union competitors offer travel cards while others offer cash pickup or delivery.

Jarrod Suda

Money Changers: Tesco, M&S, Travelex, Sainsbury's, etc.

UK money changers often advertise their zero commission fees, which is a plus. However, the exchange rate they use to buy your pounds and sell you dollars will be weaker than the mid-market exchange rate.

While the Post Office's 3.8% margin is average, other British money changer companies may take more. Their rate schedules will fluctuate day by day.

You can usually order dollars with money changers in one of three ways:

1. Order dollars in store;
2. Buy dollars online and collect them the next day;
3. Same-day collection.

Travelex

One such brick-and-mortar provider is Travelex, a worldwide bureaux de change found in airports around the world, which we have reviewed on Monito. The pound to dollar exchange rate is usually better online, which will give you more dollars for your pound sterling. They have a travel card, which you can use to hold several currencies at once.

How to Sell Your Leftover Dollars

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If you have leftover physical dollars, you can always store them up for your next trip to US or you can sell them back to banks and money changers in the UK. However, the rate that these money changers will use to buy back your dollars will be much weaker than the real mid-market exchange rate. And they don't always buy back loose change, such as if the amount is under $100.

Holding too many dollars at the end of your trip often happens because you overestimate how much you need when you order cash online. If you use a foreign transaction fee-free card or a multi-currency card to make purchases instead, then you'll never have to worry about carrying idle change.

That's why in the few cases that you need cash for tipping or for bus rides, we recommend using travel debit cards that offer fee-free monthly allowances for ATM withdrawals. Take out $100 or $200 in cash at a time, but rely on digital card payments for the rest of your holiday.

References Used In This Guide

1. Cash Withdrawals. Starling Bank. Accessed 25 August 2022.
2. Wise Calculator. Wise. Accessed 22 June 2022.
3. Revolut Calculator. Revolut. Accessed 22 June 2022.
4. Visa Exchange Rate Calculator. Visa. Accessed 22 June 2022.
5. MasterCard Exchange Rate Calculator. MasterCard. Accessed 22 June 2022.