After spending all of my adult life traveling the world, I have learned a few things about getting the best deal on foreign currency exchanges. In fact, my role as Chief Content Writer at Exchangecurrency.com has served to enhance my knowledge of the Forex market and currency exchanges. For the best rates, follow these tips.
Traveler’s Checks
When my parents traveled, they always purchased traveler’s checks. In the past this method worked, but not anymore. Few places want to cash a traveler’s check. Even worse, banks will charge money to write the check and then another fee once you want to cash it. Throughout the entire process, you will be losing money and valuable time. The only benefit to having a traveler’s check is safety. If it is lost, you can get your money back.
Bank and Airport Exchanges
This is one of the worst options for people traveling abroad. The bank ends up charging a higher bid-rate spread than normal and airports are exceptionally awful. Often, the client will also be charged a fee to make the transfer. You walk away having spent money to have money. I never exchange money at my bank and I rarely exchange funds at an airport. Whenever I choose to exchange currency at an airport, it is only for convenience. Debit and credit cards will charge me to purchase a burger at the airport or pay for a taxi fare. If I exchange money at an airport, it is only so I can have cash in hand.
You pay a fee to get the card. You pay a fee to use it. The rates? Not bad, but they could be better. Like traveler’s checks, the only benefit to using a prepaid debit card is safety. You can easily request a replacement from abroad as long as you are willing to pay a fee. In addition to cost, the biggest negative to a prepaid debit card is the limit. It is far too easy to overestimate or underestimate the amount of money that you need on your vacation. Once you run out, you will still have to resort to another option.
How I Get the Best Rate
In general, I use my PayPal card to withdraw money. They charge my $1 to withdraw funds from any ATM in the world and 1 percent of what I withdraw. Compared to my Bank of America debit card, I save massive amounts of cash.
When I withdraw money or make purchases, I always choose to do it in the currency of the country I am at. Banks and retailers like to give you the option to complete your exchange in your currency, but this will only cost you money. They tack on extra pennies to the exchange so that for an entire purchase, you end up spending more. I bought a computer in Europe one year and learned this lesson the hard way. By selecting to buy it in dollars instead of euros, I spent almost $100 more on the laptop.
Overview
If you need large amounts for a home or car purchase, contact a foreign exchange broker online who specializes in it. For most traveling, a debit card or PayPal card will work well, just monitor it for fraud.
Sources: Author’s own Experience
The author writes for the website exchangecurrency.com and is a financial blogger with Yahoo Finance. After years of travel, she has figured out the easiest and cheapest way to navigate foreign exchanges. She is not affiliated with PayPal or any subsidiary, although she does have a PayPal card.
