What to know before exchanging your currency while travelling
You’ve just saved enough money for your first overseas holiday. You are excited, looking forward to the cultural and historical experience, and you’ve done your research. You are ready to get onto that plane (cue John Denver’s, Leaving on a Jet Plane). But you haven’t considered buying foreign currency, how and when to change your money and the process involved. Each country has its way of dealing with foreign exchange, so it is vital to research and have all your ducks in a row before boarding your next airbus. We’ve put together some tips that will help you on your next trip.
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In other words, compare before you buy. Let’s use Asia as an example here since you can generally use more than one currency on the continent. Say you are heading to Vietnam for a week-long vacation. The country’s currency is the Vietnamese dong. Using US dollars in major cities such as Hanoi and Ho Chi Minh City is widely accepted. So here you are presented with two options. Either exchange your home currency for the dong or the US dollar.
Say you are traveling from the UK and exchanging the pound; this currency is much stronger than the US dollar and even more so than the dong. With this choice, you can select either one since you will not be losing out. The problem arises when the roles are reversed. So, when you are traveling from Vietnam to the UK, you will not be able to use the dong or the US dollar. Remember to check different exchange services to see the best price for the currency you need. Look at as many as you can before making your decision.
When to exchange
For the most part, tourists choose to exchange their currency a few days before they depart, but this might not always be wise. Here’s why. You might not always get the best exchange rate in your home country; this is only something you will know once you arrive at your destination. But you do need to be careful. Try to avoid doing this at the airport. Instead, opt for one of the country’s registered banks. Also, look at the home currency you are travelling with. If it’s the US dollar or pound sterling, you will not have any issues with exchange. Always keep an eye on what your destination country exchanges before making this decision, and stay up to date on exchange rates.
Check the buy-back rate
Here you need to be smart because you can lose out. Certain currency exchange services offer a buy-back guarantee that locks in the price. This helps since you will not need to look around for the best buy-back rate; instead, you will agree to a set amount beforehand. Also, look out for commission fees; these can often be substantial amounts, so ensure you are quite literally getting bang for your buck.
Understand your purchasing options
Do you want to use cash, travel cards, or even traditional credit cards? This is something you need to decide upon before you leave. Understanding exactly what you want to do on your journey will help you with this. Here are your options:
- Cash: The benefit here is that you will always have it on hand, use it anywhere, and can always withdraw more money when needed. This does leave you vulnerable to fluctuating exchange rates. Over and above this, theft is also a significant concern, regardless of where you head in the world.
- Travel money cards: Many major banks offer their version of a travel card. With this card, you shop, pay for food and excursions, and so much more. Usually, these cards are linked on a global scale, allowing you to use them as you would any other card back home minus the exorbitant admin and transaction fees.
- Traditional credit card: Probably the easiest choice out of the bunch since you can use most credit cards internationally, but there is a catch. Using your credit card in your own country generally has a set interest rate and no conversion fee. If you use your credit card internationally, it does come with high exchange and ATM fees. Be sure to check out which ones are best if you go for this option.
To finish, you need to be wise when working with money. While you are only interested in having a wonderful time, naturally, you must be careful. Always consider that any exchange or transaction in your home country could be as much as ten times the cost in the country you are travelling to.
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