You are travelling to another country and therefore need to exchange your money to the local currency. While you plan on doing so before you leave, you may need to exchange more during your trip. Below are 5 tips when exchanging currency and being conscious of them will ensure you do not lose money when doing so.
1. Avoid popular areas
When it comes to exchanging currency, some places are more convenient than others. As a result, it may be tempting to use these places. However, doing so will cost you more in the long run.
If you need money exchange, avoid places such as airports, train stations, hotels, and kiosks in popular tourist areas. These places offer extremely poor exchange rates and you will not get the value for your money that you should be. Instead, shop around. Look at exchanging your money at actual banks. ATMs also offer good value. You will pay a fee but it will not be as much as if you exchange your money in the popular areas mentioned.
2. Avoid “no-fee” kiosks
You obviously want to get the most back when you exchange your money. Therefore, it is only logical that when you see advertisements at currency exchange kiosks stating that they do not charge a fee, you will be attracted to them. However, there is always more than meets the eye in these instances.
“No-fee” kiosks may state that they do not charge a fee for exchanging your money however this is misleading. To make up for fees, they often offer poor exchange rates when compared to other currency exchange locations. Therefore, unless you are in a state of emergency and need cash as soon as possible, avoid these exchange kiosks.
3. Know the exchange rate
The currency exchange rate refers to the rate in which one currency can be exchange for another. This rate is never constant and changes daily with factors such as interest rates, public debt, and economic performance influencing it. Because it is ever-changing, you need to keep an eye on it to ensure you are getting the best deal possible when exchanging your money.
Before exchanging your currency, do your homework and know the going rate. Because this changes daily, be sure to check what the rate is the day that you are exchanging. This can easily be achieved by going online and using one of the conversion sites available. Keep in mind that you will be paying more than what is stated online due to commissions and/or fees.
4. Use US currency
When travelling abroad, it is logical to think that you need to transfer your money into the local currency of where you are going. However, in many parts of the world-especially tourist areas-the United States (US) dollar is accepted and in some parts of the world even preferred over the local currency.
Before converting your currency to the local one of your destination, consider using US dollars instead. If you reside in the US, you can have the peace of mind that your currency will be accepted and you will not be subjected to charges to exchange it.
5. Make fewer transactions
When travelling abroad, you need to be mindful of the fact that every time you exchange money or withdraw it from an ATM you will be charged fees to convert it to the local currency. These fees will add up, but there is a way to save on them.
Instead of exchanging or withdrawing small amounts regularly, consider doing so in larger amounts. In doing so, you will be making fewer transactions and subsequently you will be charged less in exchange fees.