You decide to take a vacation and book your flight, hotel, and car. Because these things are so expensive, you need to be careful with your money to ensure you have enough for things you need while you are abroad. A big factor in this is how you exchange your currency. Below are 5 currency tips when traveling abroad. Being conscious of them will ensure you are not wasting your hard-earned dollars.
1. Use credit cards
While they are useful, people often attribute credit cards with high interest rates and fees. However, when it comes to traveling abroad, they can help you in keeping currency exchange fees down significantly.
No matter where you choose to do it, currency exchanges will always cost you in fees. This is discouraging because when you are going on vacation you need all the money you can get because of all the things that need to be paid for. Many credit cards do not have any foreign exchange fees and if they do it is only approximately 2 to 3 percent. That way you will have more money to go to other things while you are on vacation.
ATMs are widespread and available to sue in most areas of the developed world. They are convenient but you need to be careful using them when you are traveling abroad.
ATMs are considered the best way to cut down on currency exchange fees. While they may charge 2 to 3 percent for its use, keep in mind that your bank will also charge a fee per transaction that can range between $2 and $5.
The prevalence of ATMs allows you to avoid carrying large amounts of cash that can make you a victim of theft. However, you still need to plan withdrawals carefully, being mindful of what you need to avoid excess transactions that result in additional fees.
3. Avoid currency kiosks
Currency kiosks are typically found in airports, hotels, train stations, and near popular tourist areas. While they are very convenient, using them can cost you excessive amounts of money when you could have easily saved exchanging currency somewhere else.
Many currency kiosks advertise that their exchange rates are extremely competitive. While this may be true, most if not all of them charge an exorbitant amount in additional fees. If you need to use a currency kiosk, ensure that their spread, also known as service costs, is less than 3 percent. Also confirm that they do not charge any fees.
Before leaving for a trip, it is understandable that you want to at least have some currency of the country you are visiting. However, the typical spread at banks is 10 percent, meaning you will be forfeiting a lot of money that you did not need to.
Having a little bit of currency of the area you will be visiting before you leave is appropriate but only exchange enough to get you where you can exchange larger amounts at better rates. When you reach your vacation spot, try to find the bank that is affiliated with the one that you use at home. Doing this will allow you to save on transaction fees.
5. Know the daily rate
Before your trip you check the exchange rate to know how much you should get when you make the transaction. However, these rates change daily and you need to know what an acceptable exchange should be.
It is not suggested that you know the exchange rate down to the last decimal. However, you should know the rough rate when you do go to exchange. If you are doing it after you arrive at your destination, there may be people who try and take advantage of a foreigner who is unaware of the exchange rate. As a result, you need to have a good idea of what it is.