Your expertise in pulling off attractive deals on hotel bookings, rentals, or flights to International destinations is of little value in the absence of optimal planning of your tour budget through insightful knowledge of economical foreign currency exchange tricks. This information is imperative, as it can help you save substantially on foreign exchange fees and transaction processes.
When planning a trip to countries that use another currency, it is crucial to know the most economical ways to exchange money. Many travelers are often hassled by the tricky choice of converting the currency in the present or waiting for the currency to appreciate in value when landing in a foreign country. The most favorable exchange rate will invariably come your way currently, as major currencies exhibit a trivial +/- 1% movement in a day, unless your trip is planned for months later. Your prime motivating driver should be to look for a place that will offer the most inexpensive money exchanging option.
The discussion below will offer insights regarding how to exchange currency without going belly up.
Analysis indicates that the foreign exchange fees charged at Airport are exorbitant. This rule holds good for train stations and every important transportation destination which serves as an access route for a country. It is advisable to scout for an ATM prior to accepting the foreign currency exchange rates at an airport. This can really solve your problem by facilitating small volumes of exchanges to take care of the initial hours in a foreign land.
You will literally stumble upon different currency exchange rates in different hotels and that too will vary by country. However, some experts opine that you will get a good deal in hotels over local exchange booths. However, you have to exercise your discretion as some hotels may tend to overcharge you with wacky rates. Compare rates to arrive at the most economical one. However, a majority of experts suggests that it is better to shun exchanges at hotels until you are left with no alternative. Online currency converters should be used to determine the markup to avoid falling prey to high transaction charges.
Credit Card & Debit Card
Foreign currency exchange via a credit card will give you a fair deal. Top notch companies like Visa offer heavily discounted exchange rates applicable for corporations and therefore, are way below retail rates. However, you should watch out for a foreign currency conversion fee, which is charged on every purchase by most credit card issuers. This may amount to 1-3% of purchase value. It is prudent to ring up the company and enquire about the applicable fee. Your tour budget will get a fillip by opting for the lowest 1% fee card. Avoid drawing cash advances with a credit card, although you may get a favorable exchange rate. This is because you will have to pay a high interest rate of 20% or more and interest accumulation starts the moment the advance is drawn. Banks charge 2-3% fees on debit card transactions. Reputed companies and banks offer good foreign currency exchange rates, and cards should be used for all purchases. However, developing countries may not support such cards.
Using a debit card at an ATM facilitates easy withdrawal of high amounts, consequently lowering rates and lessening transaction costs. However, you should inform your bank about the trip abroad to avoid the risk of getting your card frozen by your bank, as they detect seeming suspicious behavior. Also, keep in mind that your ATM withdrawals may attract a fee, so it is advisable to check the withdrawal rates with your bank before leaving. Never use anything except bank ATMs, or you will be hit with exorbitant fees. ATMs serve as economical foreign currency exchange locations; however, you should always check with your bank in confidence before leaving.
Prepaid Foreign Currency Card
Prepaid cards are absolutely safe to use abroad. If your card information is fraudulently captured during online/phone shopping, the money transferred out can be claimed. If the card is lost in transit, the provider will get the card cancelled and issue you a new one. The card can be used worldwide with a very minimal foreign currency exchange rate. However, by virtue of being relatively new, prepaid cards carry many incidental charges like card application fees, ATM withdrawal fees, and top-up charges. But fortunately, the competition is increasing in the prepaid cards market, which is driving the fees down. Besides, you can take advantage of cards which are specially designed for foreign travel.
Travelers checks are undoubtedly safe, but they come with a hefty currency exchange fee. You have to keenly shop for good deals to capitalize the most in foreign currency exchange locations. You should constantly surf the net to keep track of exchange rates, and once a good deal comes your way, make it a point to transfer funds even though it is well before your actual journey. If rates are expected to drop, play it safe and transfer only half of your funds. If you cash out checks abroad, an additional charge will be slapped on you. So, try to carry checks with larger amounts on them. Do shop in and around local area for the best exchange rate.
Local banks serve as the most competitive money exchange converter, giving you the best rates. Commissions are missing and only nominal when and if they are charged. Banks that rely on supply and demand mechanisms will offer rates closest to the global foreign exchange market quotes. Some banks may accept the exchange rate fixed by the local government. A currency exchange rate calculator or a local newspaper should invariably be checked for current rates before visiting the bank. a credit card, traveler’s check, or ATMs can be used to conveniently change money at low cost. You should enquire with your bank about any withdrawal fees charged at foreign ATMs, as this will be additional to foreign bank’s charges.
Buying Cash Online
Buying cash online and picking up the same at an airport is more economical than exchanging currency at said airport. However, this does not make it attractive as you may have to bear high current money exchange rates and hefty commission charges on a low volume transaction. You should keep an eye on flat fees and minimum charges as both of them dramatically impact the rates, dependent upon the volume of money exchanged. Some operators may slyly get the commissions included in the rate. Handling fees also matter.
Currency Exchange Business
Currency exchange business is flourishing in major tourist cities and the competition promises rich dividends in terms of better negotiated rates for travelers. However, if you belong to an area other than major cities, you should thoroughly check the prevailing global rates to compare foreign exchange rates and transaction fees of businesses to avoid getting cheated. You should definitely haggle over the best rates when getting huge amounts exchanged. Most companies will make concessions or agree on for waiving a portion of the fees. Fees charged by banks are comparatively higher.
More Tips on Currency Exchange
Now, you must have developed a fair idea about how to exchange currency optimally. Mentioned here are some rules of thumb which you must always keep in mind. You should wind up the entire process in a single transaction to avoid paying repeated exchange fees for small amounts. Always give the first priority to banks for getting best deal on your money exchanged and, Try to avoid the money exchanged at hotels and Airport; else you will be ripped off with high rates and exorbitant fees and at Airport counters charge high fees. Try to exchange the bulk of your money in the country being traveled to. If you are confining yourself to cities, credit cards or debit cards from Visa/MasterCard should be used for all purchases. However, when traveling in rural areas, you should keep ample supply of cash on hand. Always conduct research into the destination’s currency exchange conditions. Also, be sure to compare the rates to know where to exchange foreign currency in order to obtain the most favorable rates.
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