When travelling abroad, the cost of the trip, accommodations, meals, and activities add up and therefore you probably want to save as much money as possible when the need to exchange currency arises. Failure to acquaint yourself with money exchange procedures and regulations could mean that you will incur unnecessary costs. Between ATM charges, credit card surcharges, and bureau commissions, you will find that you may have to pay extra for having to exchange one currency for another.
However, this needs not be the case. You can equip yourself with the knowledge to ensure that every dollar in your possession counts and you keep exchange fees to a minimal. You do not have to throw away your hard-earned money on costly commissions and exchange rates that are below the acceptable standard. Below are 4 tips to follow when exchanging currency.
1. Do your research
You do not want to go in blind when you exchange currency so doing some research beforehand is crucial so you know what to expect and are aware of the current market rates. A good place to start on your search would be a reputable online currency exchange site to get a basic idea of what the current rates are and what you can expect when you go to trade your money.
It is noteworthy, however, that the rates of exchange posted on these online sites are usually lower than you would expect at an exchange kiosk or financial institution. Nevertheless, you will get a concept of what you will receive in exchange and will be able to plan ahead.
2. Paying a commission could be cheaper
Many travelers tend to opt for exchange bureaus that have a “Commission Free” sign on their premises because if it is commission free, it must be cheaper. However, the fact is most of these agencies that do not charge a commission often offer a very poor currency exchange rate and hidden fees to recuperate their costs. Therefore, it is recommended that you consider dealing with agencies that charge a commission, as they usually have a better rate of exchange for your money.
Before following through with an exchange of currency, confirm the rate with the agency and calculate how much you can expect back in return down to the last dollar. That way, you will have a full grasp of exactly how much you are saving from the deal and you will not be taken advantage of.
3. Consider the location
It is a common practice for currency exchange agencies to base their rate on their location. Those that are located in prime areas like shopping districts, tourist destinations, train stations, and airports are usually more expensive than those that are located elsewhere because they take advantage of the fact that they are more convenient to use and readily available. If you want an acceptable exchange, avoid the ones located in these areas. Take the time to use exchange agencies and financial institutions that are removed from these zones because the rate that you receive will definitely make it worth it.
4. Use globally accepted currency
You may want to consider using a currency such as the United States Dollar or British Pound as they are widely accepted as a medium of exchange in many countries around the world. This will help you to save on commissions and are even preferred in some countries over the local money.
In some countries, the local currency is exchanged at a fixed rate meaning that you can opt to use either the dollar, pound, or the local currency in your transactions. Be aware of the rate of exchange in countries where the rate is not fixed. Some traders will charge you more if the exchange rate is variable and you will be out a noticeable amount of money, putting a damper on the whole trip.