Money is an important part of life. It is also an important part of travel, especially when you’re traveling abroad. Going abroad usually includes exchanging currency from one into another. People are often intimidated or confused by the process but luckily, it is not a complicated process. Knowing the ins and outs will help you feel secure before and during your travels while also being able to avoid common mistakes made by others.
What is currency exchange? Currency exchange is when you take your money and turn it into money used by the local people and country you are planning on visiting. You can’t spend American dollars in Paris because they use euros.
What is the exchange rate? An exchange rate is how much one of your currency is in another currency. For example, one American dollar is equal to .88 euro (as of the date of the article). Exchange rates are based on stock markets, margins, and more. From day to day, the exchange rates stay approximately the same, but they do vary over time.
Where should you exchange currency? There are lots of places you can exchange currency. Foreign airports have currency exchanges, but these are one of the worst places to exchange your money. Airports are convenient, but they have a much higher exchange margins and rates, which means you get less money than you would other places. Your personal bank can order currency for you before you leave on your trip. You can also compare rates and purchase currency online. Popular and credible places to look are coinmill.com, bestexchangerates.com, and Travelex.
Are ATMs a good way to go? ATMs are incredibly convenient. They can also be a better option than a currency exchange. This depends on your bank and their foreign transaction policies. ATMs often charge a transaction fee. If you decide to pull out cash from an ATM, it is best to pull out a large sum at once to minimize the amount of fees charged.
Are credit cards better than cash? Having a large wad of cash on you while traveling can be anxiety inducing. Using credit cards while traveling is a great way of not keeping cash on you while you are abroad. Some credit cards charge transaction fees when used in foreign destinations. Not all. These fees can add up quickly. It is best to check with your credit card company to see what their foreign transaction policies are.
Exchanging currencies can be daunting the first time you do it, but it is actually a very simple process. Checking to make sure you are getting the best exchange rates and not being gouged at the airport is a great way to save yourself some money so you can spend that cash on your next adventure.