Very few things can beat the thrill and excitement that foreign travel affords. However, before you prepare your itinerary with places to see and cuisines to try, you need to budget for your trip. Travelling abroad can be expensive, so naturally, we would all love to get the most value for our money.
Efficient currency conversion can make a significant difference to your travel budget. Usually, when you set out to convert currency, you may need to pay a ‘mark-up’ on the exchange rate plus a service fee. Depending on when, where, and how you exchange the currency, this mark-up could range anywhere from 3% to a whopping 15%!
So, it is important to be mindful and make note of some important currency exchange tips that you could put to use whenever you travel abroad.
Do your homework
If you have the luxury of planning for your trip a couple of months in advance, keep an eye on the exchange rate movement between your home and destination currencies. A simple Google search will show you the present interbank exchange rate. To get a better idea of what your actual exchange rate will be, check with a reliable source such as our currency converter.
A common dilemma travellers have is: Should you get foreign currency before you leave? The short answer is yes and you could also consider transferring cash even before you travel. You don’t want to land in a foreign country without any valid currency. At the same time, you don’t want to block too much capital before you travel. Monitoring the exchange rates will give you a fair idea of what value you should convert before your travel, and if you should capitalise on any favourable currency movement.
Download a currency conversion app
Among the currency exchange tips you could leverage, a smart one is to track the exchange rates via an app and set an alert for significant currency movement. This will be useful not only while shopping for rates before you travel but also while you are at your destination.
Visit trusted banks and currency exchange houses
Wondering where to exchange money before you travel? Banks and trusted currency exchange houses are your best bet.
Before you set off, make a quick visit to your bank or exchange house and look at the exchange rates they offer. Many banks offer travel-specific debit and credit cards. If you’re a frequent traveller – or aspire to be one – opting for such a card can save you a significant amount in transaction fees.
These cards have many other benefits too, such as discounts on air tickets, complimentary airport lounge access, low or zero transaction benefit on withdrawals from partner banks, cash back offers, and many more.
If you don’t have a travel-specific card, an important money exchange tip is to not swipe your regular debit/credit card at merchant establishments such as eateries and small shops. Doing this might cause you to pay exorbitant charges on transaction fees. It is always better to pay in cash for small transactions.
Places to avoid
Among key money exchange tips that you have to be mindful of, when looking to save on transaction costs, the ability to identify dubious places and people rank high.
As soon as you stroll out of baggage claim at the airport, you will see a number of exchange kiosks. These offer the most convenient option for travellers who have just touched down and have no local currency. However, as the premiums charged by these exchange desks are among the highest, one should try to avoid them.
Also, do not convert currency at tourist spots. Every other shop at a popular destination will be willing to exchange money for you, but the service could come at a heavy cost. If you don’t have adequate cash to make the transaction, it could end up hurting your wallet.
Similarly, avoid transacting with people who approach you in public offering tempting exchange rates. These could be touts or scam artists who offer a very lucrative deal, but there is a strong possibility that the cash they are offering is stolen or counterfeit.
Opportunities to look for
It’s good to have an idea of your native bank’s partner ATM network in the foreign country. The tie-up in most cases ensures that you don’t pay exorbitantly for transaction costs.
One of the key currency exchange tips to keep in mind is to avoid withdrawing cash from ad hoc ATMs. Not only is this practice unsafe, it also presents a triple threat. You could end up paying for currency conversion plus transaction costs plus a non-customer/non-network service fee.
It is a smart move to keep an eye open for local government agencies such as post offices, where the exchange rates are often subsidised. These may not be easy to find on your travel route, but if you do come by such an agency, there’s no harm in trying your luck.
Play it smart
You could really optimise your travel budget with a few practical money exchange tips. For example, instead of making smaller frequent withdrawals and paying a service fee every time, consolidate your transactions and reduce the overall cost.
Develop your budgeting skills and withdraw only as much money as you need. If you’re left with excess foreign currency, you face the hassle of getting it reconverted after paying a conversion fee.
One smart tip you could keep in mind is to transfer money in advance to your destination country, through Xpress Money and once you land you can easily receive cash from the nearest Xpress Money agent partner location.
Still wondering if it is better to exchange money before travel? Remember, there are mobile payment apps that allow international payments. These ensure you don’t have to waste your precious time searching for ATMs and standing in queues to get your money. But do complete all regulatory compliance procedures before you embark on your journey, so that your transactions don’t get declined.
Armed with these prudent currency exchange tips and by making small savings here and there, you may just be able to add more days to your international vacation!