You can undo all your good work of getting a vacation at a bargain price if you don’t get the best deal on your travel money. Most of us have to save pretty hard to afford a great vacation, so making sure you get most bang for your buck, or pound, or peso, when it comes to currency exchange is really just an extension of that. Foreign exchange is just another purchase decision so you should make the same considerations as you would for buying anything. Here are some tried and tested ways to get the best deal on your travel money:
There are better times to get the best deal on your travel money, and other times when you won’t be getting as much in return. It all depends on the exchange rate, and this is why you want to keep an eye on them in the months leading up to your departure. Keep up to date with the latest ‘interbank’ rates on your currency pair, and compare this with historical data so you know what’s best. Buy when the exchange rate is good and not likely to rise instead of fall.
Currency exchange fees vary from provider to provider. To get the best foreign currency deals, take a good look at the market – including both high street exchanges and online exchanges. As a general rule, you should avoid exchanging your money at the airport, and you should especially avoid airport exchanges where there is no competition nearby.
You should understand all the jargon to ensure that you are not exploited and that you can get the best foreign exchange deals. There’s the ‘Sell Rate’, which is what you get when you convert your native currency into the foreign currency. There’s the ‘Buy Rate’, which is what you get when you convert your leftover foreign currency back into your native currency. And then there’s the interbank rate. The interbank rate is what banks exchange with.
There are lots of exchanges which boast ‘0% commission’, however this is not always as beneficial as it seems. Most exchanges that offer small fees get you with higher sell rates and lower buy rates, manipulating the margins to make as much money as they can. The best possible rate you could exchange with is the interbank rate, and though you will never achieve this rate, to get the best deal on your travel money you should look for margins that are as close as possible to this rate.
There are lots of specialist online exchanges that offer better exchange deals than brick-and-mortar exchanges. With these online services you order by transferring money electronically, and they then deliver your money in the post.
So you know that you can find the best deals for your travel money online, but where do you find the best online exchanges? This is where exchange comparison sites can really help you out. Go with a reputable online comparison service and make sure it is impartial.
Exchange agents will often offer better exchange rates when you exchange larger sums of money. Generally you can earn as much as 0.5% extra on the standard rate advertised by the exchange if you take in a large amount to exchange. The point here is that, if you are able to, you should exchange your money all in one go.
In some cases, the best way to get the best foreign exchange deals is to use a credit card abroad instead of exchanging cash. In terms of foreign exchange fees, there is little difference between the two, but credit cards are better for safety in populous areas where you can get at your funds easily. The one thing you must absolutely make sure of with your card however is that it comes with no foreign transaction fees. Such cards can be found with all types of credit card provider – especially credit unions and community banks.
If you don’t want to carry lots of cash, and you don’t want to rely on plastic while you are abroad, traveler’s checks may be the answer. You can get good deals on traveler’s checks with the major exchanges, and the best thing about them is that they can be replaced if they are lost or stolen. These give you the safest way to take your money abroad.
It is definitely worth the effort to get the best deal for your travel money. A small saving each transaction can amount to a significant value over the course of your vacation. What’s your favored way to take your money on vacation?
Please rate this article