Foreign tourists are often faced with one dilemma. They are confused about what is the best way to carry currency, while touring a foreign destination. Traveler’s cheques are one of the widely used instruments but they are not accepted in all the countries. Credit and debit cards carry hefty transaction charges and other hidden fees. This leaves travelers with the option of cash.
It is always advisable to carry a small amount of cash in the local currency of the nation, you are visiting. Making payments in local currency will help you get good deals in your destination country. You can exchange currency at your bank or a reputed and trustworthy currency exchange in your city.
Here are 3 smart rules every traveler should know before exchanging currency.
- Learn about Exchange Rate and How it Operates
Before you exchange currency, it is advisable to learn the basics about exchange rate and how it changes. In simple terms, the exchange rate is the amount of money you can buy of a foreign country in exchange for one unit of your local currency. For example, if you live in Canada and are planning to visit Japan, the exchange rate is the amount of Japanese Yen, you can buy for one Canadian dollar. Currencies are traded in forex markets and the exchange rates fluctuates on a minute by minute basis. Banks and other currency vendors fix a daily rate for buying and selling foreign currencies. The exchange rate is generally expressed in pairs like CAD/JPY.
- Never Opt to Exchange Currency at the Airport
Never exchange currency at the airports. The currency exchange counters at the airports and major tourist destinations charge huge fees and commissions for currency exchange. Though airports may seem to be a convenient option, they are pricey too. The rate of exchange at a bank or a currency exchange will be more competitive, when compared to that of the airport kiosks.
- Compare Exchange Rates
If you want to get the best value for your money, it is always advisable to compare the exchange rates at different banks and currency exchanges. Most of the banks and exchanges provide free quotes. You can also know about the prevailing exchange rate from newspapers or the internet.
Following these 3 rules will help you to get maximum value for your money. However, keep in mind to choose a registered currency exchange with good reputation for all your currency exchange transactions.