Travelling Abroad? 9 Forex Tips To Get The Best Rates
Every country has its forex regulations that limit how much foreign currency you can carry. Know these rules before travelling to save yourself from legal trouble and financial losses
Planning an international trip, whether for business or leisure, involves a lot of preparation. While the priority is often getting the best accommodation and tickets, securing the best forex rates should be at the top of your list. Overlooking currency exchange can lead to unnecessary expenses and disrupt your travel budget. To maximise the value of your money, here are some key forex tips to keep in mind for your next journey.
1. Plan & prepare in advance
When planning your trip, list down your likely expenses which require forex and exchange the required amount at a bank or reliable forex provider. Avoid exchanging currency at airport money changers who are notorious for offering lower rates and higher fees.
2. Compare forex rates to save more
Forex rates offered by different banks can vary based on the bank’s policies, interbank rate, and mark-up fee. Even the slightest difference in rate can save you money. This is why it is essential to compare rates before exchanging your money. There are many apps and websites which allow you to compare real-time rates being offered by banks, forex providers, and online services.
3. Opt for forex cards
Forex cards are ideal for when you’re travelling abroad. They are more cost-effective as they offer a better exchange rate, are widely accepted, and easy to use. They also charge a low transaction fee and being prepaid cards, prevent the risk of overspending. Since the rate is locked in at the time of loading, they eliminate currency fluctuation risks.
4. Watch out for hidden fees
Some currency providers may sneak in a service fee or mark-up in your exchange transaction that can make it costlier for you. To avoid paying extra, always ask for a detailed bill listing all charges when exchanging money.
5. Know the mid-market rate
The mid-market rate, or interbank rate, is the mid-point between a currency's buy and sell rates. It serves as a benchmark for fair exchange rates and can help you avoid hidden mark-ups when exchanging currency.
6. Have multiple payment options
Carrying a backup is essential when travelling abroad, especially for making payments. A smart way to do that is to carry a mix of payment methods like cash, forex cards, and credit or debit cards. This ensures you are prepared if one payment method isn’t accepted.
7. Avoid Dynamic Currency Conversion (DCC)
Dynamic Currency Conversion (DCC) is a service offered by some merchants and ATMs that allows you to make payments abroad in your home currency. However, this involves higher exchange rates and extra fees, increasing your costs. Avoid this by paying in the local currency.
8. Plan ATM withdrawals
ATM withdrawals can provide easy access to cash when abroad but per-transaction fees can add up with multiple withdrawals. To minimise costs, withdraw a larger amount at once. You can also choose cards offering low or zero fees on international ATM withdrawals.
9. Understand and follow local forex rules
Every country has its forex regulations that limit how much foreign currency you can carry. Know these rules before travelling to save yourself from legal trouble and financial losses.
Forex is essential to international travel and small adjustments can help you save big. Whether you are exchanging cash, getting a forex card, or using your credit/debit card, understanding the fees involved and securing favourable forex rates can ensure you have more money at your disposal for the trip.
The author is the senior manager, communications at BankBazaar.com. This article has been published as part of a special arrangement with BankBazaar.