Dealing with foreign currency can be a head-scratcher. Don’t get burned changing your money from one currency to another.
Here are our tips to avoid losing money when changing money in foreign currency exchange transactions:
1. Exchange some cash before arriving in your next country
Sometimes exchange rates are more favourable outside of the country whose currency you’re looking for. Even if they’re not, it’s best to get some cash before arrival just in case your debit card doesn’t work or gets stolen.
2. Order foreign cash at home
3. Avoid exchanging currency at airports or near tourist sites
The most convenient exchange outlets have the least favourable rates – walk a little further and save yourself money.
4. Use ATM machines to get the best exchange rate available
If you’re arriving without local money, get yours from an airport ATM or bank, not the currency exchange.
5. Use credit cards for bigger purchases
You can save even more by using your no-fee credit card when paying for hotels, car rentals and other large purchases. Just remember in many parts of the world, cash is still king, and vendors won’t accept credit cards for smaller transactions.
6. Take the time to shop around
Read the posted exchange rates and ask for the rate after commissions – rates vary based on a per-item or per-transaction basis, or on a percentage basis. To lure you in, some exchange kiosks will post their “sell rate” for US dollars rather than the “buy rate” (which is what you want if you’re changing US dollars into foreign currency) and they can differ dramatically. Another popular tactic is to list a great rate that’s only available for large quantities of money (i.e., thousands of dollars). Avoid the issue entirely by only changing money in bigger banks and post offices
7. Get rid of all your cash before you leave the country
With the notable exception of European Union countries, getting rid of your cash before you leave is best. Changing it when you get to the new country won’t mean favourable rates, and most currency offices won’t exchange coins. If you don’t want to stock up at the duty-free you can donate it to UNICEF’s Change for Good programme and other charities in many airports.