Money is an important part of organising a holiday. You don’t want your relaxing holiday to end in a disaster after you read your bank statement at the end of the trip. While digital money has become more prevalent, it’s still a good idea to exchange foreign currency to pay at your destination.
So, how to make the most of foreign currency exchange? Here are ten tips to help you save money.
#1: Start tracking currency rates
When you know you’re going away for a holiday, start tracking the currency rates. You can use websites like Google, XE, MoneyHighStreet Euro exchange rates and financial newspapers, like Bloomberg, to check how the currency rate is reacting, what the past rates look like and even check what experts are predicting to happen. This will help you figure out when might be the best time to exchange currency and what are the worst days to do it.
#2: Ask around for prices
However, you should know that the official currency rate is not the one you’ll typically get at a foreign currency exchange service. Banks, foreign currency companies and the like will always add a bit more to the rate to ensure they can make money. Therefore, before you purchase foreign currency, you want to check with different providers to find out what kind of rates they are offering. You can then compare this to the actual rate and calculate the best options for you. Never pick the first foreign currency exchange service you see.
#3: Never purchase with a credit card
Whatever you do, don’t make the purchase with your credit card. This is considered a ‘cash advance’ payment, which means the purchase will feature an additional 2-5% fee. As you can imagine, this will mean your purchase will cost quite a bit more, no matter what the deal is. To avoid these additional fees pay in cash or use a debit card.
#4: Avoid buying at airports
Another thing to avoid is buying foreign currency at the airport. The exchange kiosk might seem like a convenient place to exchange foreign currency. Because of the convenient location, the kiosks often have higher rates than any other options out there. Indeed, the rates at the airport are generally the worst – you’ll find a better rate almost anywhere in the world.
#5: Buy a Multi-Currency Cash Passport (MCP)
If you travel in Europe or some of the other big countries, like Japan and Australia, you should consider an MCP. It’s, essentially, a debit card that holds up to five different currencies, which you can use on your travels. The card has a PIN code a chip to help you spend money on your journey. It will be cheaper to use than a traditional credit card.
#6: Pick the right credit card
If the MCP doesn’t seem like a good option for you, make sure to check the credit card options or the terms and conditions of your current card. You want a card that doesn’t add an extra fee on your foreign payments. While the rate of conversation might not always be favourable when paying with a credit card, you at least don’t want to have an additional fee added to the payment.
#7:Use value currency exchange packs
Online foreign currency exchange services offer often the best rates. In addition to good rates, the providers often have special deals that might end up being more favourable, even if the rates are not the best. Value packs are one such deal and you can find them at Travelex.co.uk, for example. This means that the more money you purchase, the cheaper the deal will be. If you’re traveling with friends, it might be a good idea to have one person buys such a pack for all.
#8: Check with your local bank
Big banks will also provide currency exchange services. If you are a customer, you might be able to enjoy a special deal – meaning it’s a good way to save money. When you’re buying currency with a bank, remember to do it in advance. Local branches might not have the more rare currencies available within a few days notice.
#9: Calculate the cost of the deal
Whatever service you use, the key is to understand the full cost and not just look at the currency rate. Online services could add delivery or handling fees and handling fees are typically always added to bank fees. So, check the full cost before making the decision.
#10: Consider exchanging leftover money at your destination
If you have money left after your holiday, don’t bring it back home. You can often get a better rate at your destination for the excess currency. So, consider converting it back. The only situation when this might not be a good idea is if you know you’re travelling back to the country soon enough. For example, if you’re a business traveller, you might want to hold on to the money and simply use it when you’re back in the specific country.
Next time you are planning for a holiday, make sure to utilise these foreign currency exchange tips.