When Columbus discovered the Americas, he did not know the world would become this small one day. What took him years to find the Old World a new colony, it now takes a mere day for someone to fly between continents. One of the best gifts that globalization has given us is the utmost ease with which we can travel the world.
With low airfares and international currency exchange available a click away, traveling has become easy for everyone who wants to explore the world. But getting acquainted with new cultures and people can take time and while you cannot learn everything about a place and its people without actually getting there, you need to be careful of the risks associated with traveling. When traveling, you need the country’s currency and you have to be wary of exchanging money. You don’t want to be ripped off, do you?
So how can you avoid paying a lot of money while buying a foreign currency? Well, the first place to avoid exchanging currency from is foreign exchange kiosks and storefronts. This is because the rate that you will get at these places isn't going to be what you can get through a credit card. A small difference could mean a lot when you exchange a lot of money.
If you buy through your credit card, you can save a lot of money as compared to when you buy let’s say euros for cash that you pay in dollars. For example, you buy one euro at an exchange rate of $1.26 from a kiosk. There is a huge possibility that when you can get an exchange rate of $1.17 through your MasterCard. It doesn’t seem much now but buying 1000 euros for the same rate would make a huge difference in the total amount that you pay at the kiosk.
So, how do you escape this problem? How do you exchange money at low fees? Here are a few ways to get the best conversion rates while traveling abroad.
If you need cash, make a withdrawal from a local banks’ ATM. Be aware of what your bank charges for foreign ATM withdrawals though. If you think your bank is charging a lot, then consider opening an account in a bank that doesn’t charge as many fees. It doesn’t hurt to open a new account as much as it would if you have to pay huge fees at every transaction.
This needs to be mentioned again that a lot of Foreign Exchange Services Providers at airports and local kiosks charge a lot of fees. Be wary of them or at least compare the conversions rates with what you are getting on your MasterCard.
There are a lot of credit cards available that don’t charge a transaction fee when you make a purchase abroad. Look for such cards. Or buy a travel card. A lot of banks offer a travel card that lets you spend money without charging a lot of money. Ask your bank for one and apply for it weeks before your travels so it can be delivered to you in due time.
If you are making a purchase and the merchant offers to charge you on your card in your original currency (dollars let’s say), don’t do it. They are trying to dupe you. The conversion rates against dollars are usually not much and the merchant may add up a conversion fee on top of that. Let your bank or credit card company be in charge of the conversion rate. It is best in their hands.
You should only trust your research. Credit card companies offer attractive and competitive exchange rates but they usually charge high fees and interest rates. If you take a cash advance before, then chances are that the minute you take it, interest begins to be charged on your card instead of beginning after an interest-free grace period. Be aware of this.
It is always good to trust only yourself rather than blindly trusting what your bank or anyone tells you. Wherever you plan on traveling to next, look for exchange rates and places that can get you a good deal. Traveling to Malaysia next? Do good research on money exchange in Malaysia! Don’t let anyone fool you. Have a good time. Take care of your money.