How to Determine if your Exchange Rate is Good
The term exchange rate is used to calculate the specific quantity of a currency that is enough to buy another currency. If you’re just about to travel abroad, you will need to get the most suitable exchange rate prior to heading out.
Before we discuss how you can get the best Exchange Rates, there are two key things you should learn about travelling abroad:
a. You will be transacting using the host country’s currency – once you’ve landed at your choice destination, all your transactions will be facilitated using that country’s currency. Although it seems like a no-brainer, some tourists forget to exchange their currencies beforehand and end up being charged exorbitant exchange rates upon arriving for vacay.
b. Banks usually have the best exchange rates – avoid resorting to airport kiosks or unregulated foreign exchange firms when exchanging your currency. Such facilities provide an inaccurate exchange rate that is higher than the standard rate. Rather, choose to exchange your cash in an ATM or bank. Big financial institutions offer favorable exchange rates that are at par with the current exchange rate.
Here are 3 ways to determine if your exchange rate is good:
#1. By comparing different exchange services
There’s a vast assortment of currency exchange service providers in operation today. Apart from banks and forex bureaus, you can also exchange money online and in airport kiosks. The worst place to exchange your money would be in those currency exchange outlets located in airports and on the streets. These kiosks don’t have to advertise themselves to attract customers, since oblivious travelers flock there in a desperate search for local currencies. Sadly, their exchange rates are usually quite high. You might end up exchanging huge sums of money for much less than you would get in a bank. Always compare the exchange rates offered by different service providers to determine which offers the best rates.
#2. ATMs and Credit Cards enjoy better exchange rates than cash/traveler’s cheques
If you’re looking to get incredible exchange rates, use your credit card or ATM to purchase your desired foreign currency. Their rates are usually 2% – 7% better compared to using cash or check. In addition, it’s a great idea to utilize your credit card when sorting out huge purchases like vehicle rentals and hotel bills. Majority of credit card firms charge additional fees for customers transacting in foreign currencies, so keep this in mind. To avoid getting overcharged, withdraw as much cash as you require instead of performing numerous withdrawals.
#3. Seek help form a forex professional
Determining the present exchange rate for your desired currency pair is extremely easy if you are internet savvy. You simply need to use an online currency converter that delivers accurate exchange rates before leaving for your holiday. If you’re old-school, the best option would be to get professional help from a forex expert. Seeking help from a colleague or friend who knows the ropes would also suffice. However, it’s important to steer clear of unscrupulous currency converters and black market exchanges. These devious sources could provide you with counterfeit cash and leave you stranded in a foreign country.
These tips will help you to determine whether your exchange rate is good or not.