– Exchange Foreign Currency –
There’s nothing like coming home from a great trip abroad thinking that you were savvy about sticking to your budget only to be hit with unexpected currency-exchange fees on your bank statement and credit card bill, it can be frustrating. To help you solve this problem, we’ve made this article to help you locate the best places to exchange foreign currency.
If you’re traveling to several different countries with different currencies, planning ahead will save you even more money and time.
The most convenient spots to exchange money, such as airports, train stations, hotels, and tourist spots, are usually the most expensive locations.
Waiting in a long line to get some cash can put a damper on your travel plans.
Before you head to Europe, Asia, or the Caribbean this summer for your holiday, figuring out where to get the best exchange rate for money will save you the headache of finding a favorable rate.
As you adjust to the jet lag are the best places to exchange your money into the local currency before and after your vacation.
What to Know About Currency Exchange
First things first, you might want to brush up on exchange rate basics. Look into the local currency of your destination and check for any rules and regulations.
For example, you need to already be in Morocco to exchange for Dirhams. Many countries do allow, or even prefer, that American visitors pay in U.S. dollars.
When you go to exchange your money, you should know exactly what you’re paying. For one, you might face commission charges on a per-item basis rather than a flat percentage.
This means you should ask for the net rate before making any exchanges.
Some exchanges also post sell rates (what you get when you exchange your dollars) instead of buy rates (what you get when you exchange leftover foreign currency back to dollars), or vice versa, to lure customers under false pretenses.
Others list a rate only available for exchanges of thousands of dollars or tools like traveler’s checks or prepaid cards.
Rates vary from place to place, too, making it important to shop around for the best price before making a purchase.
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How to Exchange Currency
Start by checking with your bank online to see if it will exchange the currency you need.
You can even order the money online and have it mailed to you if you are not able to go to a branch during regular business hours.
If you’re going to a country that has restrictions on its currency for political or economic issues, your bank may not be able to access the currency.
We can only exchange currency from many African and Eastern European countries at those countries’ banks and ATMs.
One quirk is that some banks will not accept foreign coins, so consider that before you head to the airport at the end of your trip.
Here is a checklist:
- Contact a bank or credit union to make sure it has the currency or will accept foreign currency and what the fees are.
- Find current exchange rates through your bank, credit union, or websites such as https://www.xe.com/.
- Check the bank’s exchange rate to make sure it’s fair.
- Arrange for pickup or delivery.
Where to Exchange Currency Before your Trip
If you haven’t packed your bags, you may have the time to get the best currency exchange rates before you leave. Many banks, including the large institutions listed below, offer currency exchange to their customers.
Though there may be a small fee, your bank or credit union will almost always be the best place to exchange currency (and the cheapest).
You may be able to order currency at a branch location or by phone or online to pick up at a branch.
Find a location near you to get started:
You can also order through an online currency converter, which will have the cash delivered to your home. But exchange rates are less favorable, and the delivery charges will eat into your funds.
And airport kiosks or stores should be a last resort. Exchange rates are poor, and fees are high.
Places to Avoid Exchanging Currency
Believe me, when I say, the worst places to exchange currency are at airport kiosks, hotels, and tourist centers because the conversion rates are usually not in your favor.
“Not only will you be hit with extra service fees when going with these methods, but the exchange spread, which is the rate the business will give you when you are selling your U.S. dollars to them minus the rate they will give you when you are buying U.S. dollars from them is very high,” says Derek Horstmeyer, an assistant finance professor at George Mason University in Fairfax, Virginia.
“This means every time you go to a bank or a foreign exchange kiosk, you will lose 1% to 2% in a no favorable exchange rate when changing your money.
This goes for redeeming traveler’s checks as well and other comparable cash items.”
Alternatives to Exchanging Foreign Currency
Instead of exchanging currency, consider using U.S. dollars, or prepaid cards, credit cards, or debit cards since even the smallest businesses, such as food trucks, often take payments electronically.
Many countries will accept the U.S. dollar.
Many credit or debit cards offer a 0% foreign transaction fee, which you can use for dining out or buying museum, theater, or sporting event tickets, Horstmeyer says.
“A number of retail credit cards and most business credit cards now state right up front that they are 0% foreign transaction fees, which is a phenomenal feature to have on a credit card,” he says.
Some banks offer travel credit cards for frequent travelers or people living abroad. Ashleigh Scanlan, an American who moved to Australia several years ago, says her card allows her to put the money in U.S. currency and switch it to whatever countries she travels to.
“Currently, I have about five different currencies on the one charge,” she says. “I just switch it when I enter into another country.”
Using these tips for exchanging currency can help you save time and money any time you travel. It’s important to pay attention to conversion rates and what you’re paying to avoid getting ripped off.
You may even want to shop around and wait before making your transactions.
It also helps to have a mix of cash, debit, and credit cards when you travel. This helps you avoid unnecessary fees and use your money in the most efficient way.
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