While exchanging foreign currency, you’re always confronted with a big question: how to avoid hefty fees? Most of us get confused when it comes to currency exchange. It could be a big hassle when you need to exchange currency but don’t know where or how to do it.
Money is hard-earned and when it is spent, we need to ensure that we are getting the most value out of it. In this blog, you’ll learn how to exchange currency without incurring costly dues.
Let’s start with a good rule of thumb, whenever you do a money transfer, always diligently compare both transfer fees and exchange rates.
13 Places To Exchange Currency
1. Exchanging In Your Home Country
Carrying a meager amount of the traveling country’s currency is handy, especially as you arrive at the gate. For example, Countries that offer on-arrival visas accept cash only in their currency.
Exchanging money before you leave your resident country is a good way to manage cases like this and exchanging at home allows you to explore all the competitive exchangers and choose one that is favorable to you.
Almost all government and private banks offer currency exchange services with fair exchange rates. They do however demand certain documents for verification purposes, so enquire and go prepared.
3. Government Offices
Government offices like the Post Office offer more competitive rates than banks. This is one of the cheapest and most reliable ways to exchange currencies.
Many countries in Europe have now mandated government-approved Forex rates at railway stations and post offices. At the railway station, just check if the two shops have the same rates. This means the government has mandated. You can crosscheck with the XE rates online to get a fair idea. The post offices that have foreign exchange are the best.
4. Travel Agents
Not all travel agents are registered and authorized. So, it is prudent you check once before you decide to exchange currencies using them. Places like this do offer you bargaining privileges and depending on your luck you might even get them to slice a good chunk of their price. But please be cautious of anyone that offers you very unrealistic rates. Exchange rates as stipulated in the bank are a good benchmark for comparison.
5. Online Exchanges
Online exchanges are safe and easy. They provide the most reliable rates in the market. But for the privilege of their services, they do extract additional transaction fees. We suggest among the options that you open a multicurrency account with Wise or Niyo Global so you can load money with local currency and pay on the go.
While they do charge a small fee, it is worth noting that the transaction fee is about 8 times less than any bank offers. We recommend using Wise, we have used their services extensively while earning and traveling in Europe.
6. Local Markets & Hotels
Don’t be tempted by unrealistic rates at the local market and restaurants. There is a high possibility of you getting scammed with fake notes. It is always better to be safe than sorry. We have heard numerous horror stories from travelers getting scammed in similar manners. So, it is best to avoid exchanging in local markets and hotels.
7. Forex Cards
If you are traveling to a specific country and plan on residing for a while, Forex cards are a good choice. It functions as a sort of prepaid credit card where you can deposit funds in foreign currency, depending on the country you’re visiting. It also offers you the advantage of withdrawing cash. You can also use it for retail payment in outlets that offer point-of-sale (POS) machines, and even earn reward points for purchases made using the card.
8. Credit cards
We strongly insist that you use “NO foreign transaction fee credit cards”. Using credit cards of this type ensures that you incur no additional fees while completing online transactions.
Try to register with a bank that has branches worldwide such as Citi Bank, HSBC, etc. As you might already know, this increases your credit score and also offers you to earn points while you spend money. If you are using credit cards to withdraw cash, keep a note of the ATM withdrawal fees as they generally tend to be enormous.
9. International Travel Cards
International travel or global cards often offer a huge number of premium benefits including free lounge access, higher points earnings, flights and hotel offers, etc. These cards involve fewer transaction fees (However, this is entirely contingent on the company and the type of card that you choose).
Twin’s tip: While using cards, always pay in the local currency of that country, and do not use your native currency.
10. Jewelry Shops
Exchanging money at a jewelry shop is a common practice in many parts of the world. Jewelry shops often provide currency exchange services, especially in tourist areas where they cater to international visitors. Verify the authenticity of the jewelry shop and ensure that they are licensed to provide currency exchange services.
Compare the exchange rates offered by different jewelry shops and ensure they are competitive. It’s also essential to inquire about any additional fees or commissions that may be charged for the currency exchange service.
11. Authorized Money Exchanges
Authorized money exchanges like Western Union and Ria money transfer allow you to send and receive money online to international bank accounts 24×7 directly and charge you less competitive rates. This feature comes in very handy when you want to transfer bulk amounts to your friend for your long stay, etc.
Exchanges such as this usually adopt rates stipulated by the foreign market and often provide an in-house discount depending on the amount you are sending. These exchanges are also really beneficial if you wish to transfer money to your savings account in your home country. You get better exchange and convenience charges and in your home account, you get the benefits of saving in a non-residential account.
Despite the fact ATMs are the quickest way to withdraw cash, it is prudent to note that they involve a lot of hidden transactions and international fees. The fee varies for each ATM and the card that you hold, and even the type of card. The exchange rates are arguably good when compared to banks. Withdrawing cash from the ATM is the best and most useful if you’re hopping between different countries on your trip. Additionally, it is also a safer option.
Consider airports to be your last resort, only to be used should all other means fail. Airports offer the worst exchange rates. The rates are incredibly overpriced and guarantee that you incur a loss for no reason other than exchanging currency at the airport.
Important Points To Remember
- Don’t fold the currency notes. Few countries do not accept if the notes are torn or wrinkled.
- Don’t exchange more money than is necessary. Carrying bulk cash around, especially as you are traveling is always a nuisance.
- If your friend or family is traveling with you, have separate cards for each of you. This will help you in unfortunate situations where a card gets stolen or lost.
- If you have some cash left, you can save it for your future travels or exchange it with the currency of your next destination.
- Have a customer care number or email (of the bank) handy, in case of emergencies. Nothing is worse than being in a foreign land and not having access to your funds.
Twin’s tip: In some places, USD conversion works better than the local currency. For instance, most places in the Caribbean Islands and Mexico prefer to accept payment in USD, while that is not the case in Europe.