Maybe you just need a bit of spending money as you travel to a new country on vacation, or maybe you are interested in exchanging currency as a way to invest your money. Exchanging currency is now easier than ever, as the world continues to nurture valuable inter-country relationships.
Since it is such an important part of the world today, currency exchange has truly become a booming business. You will find numerous places offering currency exchange, especially in highly touristic areas. But at what price? It’s important that you know where to take your currency exchange needs, and which places to avoid.
Here are the seven best ways on how to best exchange currency:
1. Your bank
Going to your bank is one of the best ways on how to best exchange currency. It is especially important to go in advance if you are looking for a large sum of money, particularly if it is a currency that is less popular. For instance, in Canada, banks will likely have large sums of USD on hand, but probably don’t have a significant sum of Iranian Rial, if they have any at all. By going in advance, you give the bank enough time to acquire the currency you need in time for your trip.
2. An ATM from your bank
If you’ve already left the country and are looking to exchange money, first see if it is possible to find an ATM from your bank. Here, you can pull money directly from your account into the local currency.
If you cannot locate an ATM from your bank, you may still be able to use a foreign ATM. Make sure you know the fees you will be charged in advance. This option will still allow you to withdraw money in the local currency and at the going rate. You will likely have to pay fees from both the bank you use and from your bank, but it will likely just be a flat rate of a few dollars.
3. Don’t exchange at all
Unless the country you are visiting is what some term “not plastic friendly”, then you may be able to simply use your credit card to make payments. The currency will be automatically exchanged, and you will not be charged. Beware: certain credit card companies may charge for this service.
Confirm with your bank before you leave that using your credit card in your destination country won’t incur any unexpected fees. There are now certain credit card programs that are specifically designed to be used in other countries. Consider this as an option to save yourself the extra steps.
4. Watch the exchange rates
As soon as you know you’ll be travelling to another country, start keeping an eye on the going rate for their currency. Then, you can choose a day when the rate is lower based on your knowledge of where it typically floats. Having a good knowledge of the rates at which you are buying and selling currency is an important factor in ensuring you are getting the most out of every dollar.
5. Another kind of currency exchange
It should be mentioned that there is another type of currency exchange, but it isn’t the type you do when you need to pull out a few bucks for a trip. Individuals have started trading in the foreign exchange market, using it to make money, similar to the concept of trading stocks on the stock market. It is a risky investment option, but can be highly profitable when done correctly and with a little luck. Today, millions of people trade daily in the foreign exchange market. It is completely done online in a virtual, decentralized market.
6. Avoid exchanging at airport kiosks
It’s important to note the places you should be avoiding when looking for a place to exchange currency. These places are looking to profit on your exchange, and don’t be fooled into thinking they aren’t, with their flashy signs claiming the lowest exchange rates, or minimal fees.
These kiosks are made to make money. This means that their rates are inflated so that they can take a cut of the money at the end of the deal. If you’re looking to convert currency before you head out on a trip, or after your return, it’s best to plan ahead to ensure you don’t get stuck using one of these.
7. Avoid exchanging at hotels
Just like airport kiosks, hotels offer currency exchange at exorbitant rates. They are available for convenience, and convenience always costs something. Again, don’t be fooled by the ways these exchanges are marketed. They will use language that makes it sound like they are only there to help you, or that they offer the best rates of anybody else around. These exchanges do not have your best interest in mind. Your best bet is to find a better source.