PUBLISHED December 28th, 2022 08:32 pm | UPDATED July 22nd, 2024 03:35 pm
If you want to make the most of your money and time overseas, familiarize yourself with currency conversion rates before you travel. There are several methods for purchasing goods, forex trading, and exchanging currency overseas, but many of them have expensive fees or other limitations that make them impracticable for most individuals. Examine the advantages and disadvantages of each currency conversion option to avoid unpleasant surprises when you return home. When converting money, it’s not always preferable to go with the easiest choice. You can change your money before leaving for your vacation or after you arrive; however, the time and location you pick will be determined by the availability of currency exchange facilities.
If you want to get the greatest exchange rate possible while converting money, you must first become acquainted with the numerous possibilities. These are the most common techniques for exchanging cash.
Airport currency exchange kiosks and desks
Although it may be more convenient to convert money at the airport, you should avoid doing so due to the extraordinarily high conversion rates that apply. According to NBC News, airport kiosks may charge up to 20% in fees and provide a far lower conversion rate than banks and private exchange services. Airport kiosks frequently only provide a handful of different currencies. Most of the time, exchanging money at the airport is not worthwhile and should be reserved for serious financial emergencies.
Electronic payment
Before you go to the effort of relying on a credit card when traveling overseas, be sure it is accepted in the countries you intend to visit. If this is the case, you should investigate any potential charges that may arise during your vacation. Potential expenditures include cash advances, currency conversion fees, and transaction fees, to name a few. Credit card companies frequently have access to the best interest rates and can provide you with a rate that is as close to the official rate as possible.
Debit cards
Charges for using a debit card at an ATM or making a transaction in another nation are quite likely. Always use your debit card at ATMs. If there is an error with a debit card transaction, the money will be deducted from your account immediately, and it may take several days or even a week for the incorrect charge to be reversed.
Prepaid cards in currencies other than the one issued can be used similarly to credit and debit cards. They have a certain amount of money loaded onto them, and any purchases passengers make are deducted from that sum. Withdrawal fees, inactivity fees, minimum withdrawal amounts, and maximum withdrawal amounts are just a few of the various limits.
Traveler’s checks, money orders, or cash
Traveler’s checks are comparable to US dollars; thus, you must find a location that takes them and converts them into local cash. Cash is easily stolen or misplaced, but traveler’s checks may be replaced if they are lost or stolen. However, some companies may refuse to accept traveler’s checks as payment due to their waning popularity.
Business Transaction Confidentiality
If you visit many private money exchange firms or currency exchange enterprises, your chances of acquiring a better conversion rate grow. Several of these firms provide competitive exchange rates to recruit consumers. Some fees apply, the amount of which varies depending on the supplier. Also, remember that demand for such services is lower in the suburbs and smaller towns, so it is best to prioritize your demands in the larger cities.
Avoid paying extra money for currency exchange
You might think that you’ll have to pay foreign exchange fees anytime you convert cash, but the tactics listed below may help you avoid doing so.
Credit cards with no foreign transaction fees
Unlike your existing credit card, which most likely charges you 3% of every dollar spent overseas, many international credit cards do not charge any foreign transaction fees.
Valid overseas travel documents
Use a foreign travel card or a travel money card to make cheaper cash withdrawals overseas. Prepaid cards for overseas usage that are loaded with money ahead of time are useful. These cards feature fewer fees than other methods of payment. A few wallets even allow you to save several payment methods.
Banks in the area
Currency exchange at a local bank is more convenient and less expensive than at an airport or hotel. Furthermore, they often provide reasonable exchange rates.
Avoid using payday loans at all costs
When you use your credit card to get cash from an ATM, you will be charged both a cash advance fee and an annual percentage rate (APR) for cash advances, which could add up to many extra costs.
Reasons to support the local currency
If you are given the option to charge your purchase in US dollars, do not accept it. The expenses of invoicing your purchase in the local currency may be significantly less than the total of any additional hidden transaction or currency conversion fees. Insist on utilizing local currency while making transactions.
Due to the financial risks of traveling abroad, it is important to be extra careful when changing currencies, making purchases, or getting cash out.
The article is brought to you by Oanda Singapore.