Finding the best currency exchange rates can be difficult. The currency market changes every minute. These rate fluctuations can significantly affect the amount of money you receive.
It is not possible to accurately predict how the exchange rates are likely to go since it is ever changing. The following tips will help you find the best currency exchange rates.
1. Know the Foreign Currency Exchange Jargon
Like all things technical, foreign currency exchange has a jargon. Get to know the lingo to avoid being misled when exchanging money. Some of the common words you need to know are sell rate, buy rate, interbank or bank to bank rate.
The sell rate is the amount you get when you exchange your currency. Buy rate is the rate at which any leftover is converted back to your currency.
2. Do Your Research
Keep a keen eye on the best currency exchange rates. The internet provides all the information you may need. A constant check of the rates will help you decide what time is best for you to buy. Understand the legal regimes governing the currency of the country you are going to. Some have very odd rules you may need to know about.
There are countries where you can transact in US dollars, but the bills must be pristine. No risps and no folds.
3. Watch the Exchange Rates for Some Time
Get acquainted with the daily “interbank” rates. A money converter app is a useful tool that can assist you in this. Of course, you won’t get a constant rate, but you will have a feel of the average rates. Give yourself enough time to watch these movements. A month is ideal to decide when the currency is strongest.
4. Shop Around
Currency exchange rates are not the same across the board. It’s prudent to shop around before you buy any foreign currency. Do not rely on any one provider. Make phone calls to different providers to inquire on the rates.
When using a credit or debit card to buy anything while abroad, ask to be charged in the local currency. It will save you from the expensive ‘dynamic currency conversion rate’, which stands for the rate businesses apply while converting product or service price into your currency.
5. Negotiate For a Discount
Yes, you can negotiate a discount in some bureaus. The quoted rate is not cast-in-stone. No price is. If you have a large sum of money to exchange, ask for a 0.5% discount on the advertised rate. The bureaus are in business and will likely listen. For big amounts, this percentage is a big difference. Bargain!
6. Buy Online
Many foreign exchange bureaus give better rates via the internet. If you plan ahead of time, you can have the time to order cash online and pick-up in-store. You can also send and receive money through the post. In many instances, you will get a better rate online than from the high street. Compare different rates by using online currency converters.
7. Be Careful On Credit Card Fees
Do not go for the easy option of whipping out a credit or debit card without knowledge of the charges involved. Card providers differ in fees policies, but the average charge is $2. It may be cheaper to get your money from an ATM with your debit card and then convert it to whatever currency you want. You can also research on which banks give travel incentives on cards. Some offer low interest on withdrawals and zero foreign transaction fees.
8. Travellers’ Cheques
Travellers’ cheques are a good bargain for people who do not like carrying large amounts of cash. They are secure and universally accepted. The most common is the American Express. However, these cheques are only available in six currencies and access hard currency alone. This may pose a challenge if you are travelling to a place where such services are limited.
9. Prepaid Cards
Prepaid cards are a good bargain. While they eliminate the need for carrying bundles of cash, your money is locked at a constant exchange rate. From the day you buy it, the exchange rate does not fluctuate. Prepaid cards are thus cheaper than credit or debit cards. Be a smart buyer and ask about charges to avoid hidden costs. It is also wise to do some research on your destination to know whether the cards are accepted or not.
If you are to get the best exchange rates, you need to be thorough in your research. Do not believe the hype and false promises. Any provider offering a 0% commission is not being truthful. Hunt for the best foreign exchange deals, and you will find many online. If you are keen and patient, you will find deals all around you. With the tips presented in this article, you can avoid the pitfalls and get yourself the best exchange rate your money can buy.