Minimally, when you are going on vacation to another country, you will need to pay for flights, accommodations, and put some money aside for activities while you are there. These things will cost you a significant amount of money. As a result, you want to do all you can to ensure that when you need to exchange your currency to the one used in the country you are visiting, you get the best rate possible.
While there are many different currency exchanges that will be more than happy to exchange your currency for you, not all of them are the same. If you are not careful, you could end up losing out on a lot of money which will definitely put a damper on your whole trip. Below are tips to follow when exchanging your currency and abiding by them will guarantee that you get the best bang for your buck possible.
1. Know the rate
You arrive at your destination and one of the first things you want to do is exchange your currency for the one that is accepted where you are. You have no idea what the exchange rate is presently, but that is ok since the institution or kiosk where you will make your exchange will know and would never take advantage of you.
Not so fast.
Even though the exchange rate fluctuates sometimes daily, this does not mean places that exchange currency do so at the set rate. Before exchanging your currency, research what the rate is. This can easily be done online. That way, you will know what approximately to receive in return when exchanging.
Keep in mind that rates posted online may be lower than at places that actually do the exchanges because this does not take into account any commissions or fees. Also be cautious of the places that are “commission-free”. Sure these places may not charge you for your transactions but you can bet the rate will be higher to compensate.
2. Convenience will cost you
There are many places to exchange your currency when you reach your destination. Some are very convenient such as at the airport, train station, or your hotel. However, these places are notorious for giving unfavourable currency exchange rates. This could leave you disappointed in the amount that you receive in return and could even mean you are short on funds for your vacation.
Instead of exchanging currency at the most convenient spots, hold off and bide your time. Local banks are well-known for giving great exchange rates. Before you leave for your trip, check with your bank to see if they are affiliated with any institutions where you will be going. This may mean that you are eligible to receive an exchange rate more favourable than usual.
3. Be smart with your cards
When going abroad, it is smart to have cash in the local currency with you and you should do your best to use this as much as possible. However, situations may arise where you need to use your debit or credit card or it may just be more convenient.
If you want to have a credit card on your trip, before you leave apply for one that has no foreign transaction fees. Most places around the word accept credit cards and it will be handy on occasions when you do not want to carry cash. Do not use your credit card at ATMs or you will be charged hefty fees and interest for cash advances.
If you want to use your ATM card on your trip, remember that your bank may charge you excessive fees for foreign transactions. Therefore, it is advisable to take out as much money as you are comfortable with to decrease the amount of withdrawals you make and in turn the fees you will be charged.