Itinerary, stay, tickets – you have checked it all for a full-proof, convenient travel. But you may have missed out on the soul of your trip – money.
Whether traveling for leisure or business, managing currencies can sometimes be confusing. A homework on exchange rates, transactions fees, bank charges, traveler’s checks, and credit cards help decide which option is the best. Travelers try to avoid extra costs or want to pay the minimum. However, safe exchange of currency is priority. You are in a foreign land after all.
The first step is to know the exchange rates of the currency you want to buy. You will be able to estimate the amount you will receive after exchanging. Now comes the big question – where should you exchange money while traveling abroad?
ATMs are your first and best stop to get foreign currency since exchange rates at ATMs are closest to interbank wholesale rate – the lowest of all. If your bank has branches or alliances abroad, you have nothing to worry about. Some banks charge a minimum fee for foreign transaction and some generous ones don’t charge anything at all. ATMs is convenient for well-known reasons – they are everywhere, you can withdraw from any machine, and they are secure. Don’t use an out-of-network ATM.
Credit cards is the next best option, especially if you are spending a large sum in one go – buying expensive artifacts or jewellery or paying hotel bills. Credit cards usually have lower charges than banks and are better than withdrawing large sums from ATMs. Exchange rates are similar. Be sure to know your bank’s foreign transaction fees. Travel cards are a smart choice because they don’t have any charges.
Unexpected foreign transactions alert banks to possibilities of fraud and lost or stolen cards. To protect your money, banks withhold transactions until they verify. You would be stranded without access to ATMs or unable to use your cards temporarily. Informing your bank of your travel plans should be on your checklist before you fly.
Traveler’s checks are outdated but are reformed into pre-paid credit cards. Not all banks issue or exchange traveler’s checks, which is a reason exchange rates are high. It is the safest option since no one but you can use it. It is a good back-up plan to exchange money if you can’t use credit cards or ATMs.
The last resort to exchange money are banks, bureaus, and travel agencies. Some bureaus promise a no-fee exchange but the fees are included in the rates. Buying currencies at the airport could cost you a lot. A heads-up about exchanging money at the hotel you stay in – they will give you the highest and the worst rates since it includes their commission as well as the bureau’s. Local bureaus are risky because, as a foreigner, you wouldn’t know about the grey areas of the country’s currency market.
To make the most of your money, calculate how much and when you need to exchange during your travel. Because each time you exchange money, you pay.