International Finance: Tips for Exchanging Currencies

Set to go on your dream trip abroad? You’ll be surprised to know that before you go you’re going to want to learn a little about international finance. Before you go getting worried, it’s not as complicated as it sounds. You just need to learn a thing or two about currency.

Before you pack up your things and go, exchanging currencies must be part of your must-dos. After all, you wouldn’t want to spend unnecessary money on currency conversion while on your trip, right? 

Sure, while most banks are ready to exchange currencies for you, it’s normal to expect that they’ll be doing it for a high exchange rate, which, in turn, could limit your financial freedom overseas. To help you get the most out of your money we have prepared a few effective tips for exchanging currencies.

International Finance: Tips for Exchanging Currencies

Tips for Exchanging Currencies

Know About the Current Exchange Rate 

You might have heard this a hundred times, but just to highlight its importance, we’re going to say it once again: research should be the backbone of your financial decisions. And yes, the same principle applies when exchanging currencies. 

Before you even try to do anything, it’s important to know what the official exchange rate is. By finding this out, you’ll get to have a benchmark when comparing available exchange rate offers. In turn, this will help you identify which among them are the best choices you have at the moment.

You can learn about the current exchange rate by turning to online sources, such as xe.com or using Google’s currency converter.

Don’t Go All-Out on Exchanging Currencies

While it’s easy to conclude that it’s best to exchange as much money as you can before going on your trip, the truth is actually quite the opposite. In fact, the best thing to do is to limit your foreign cash and exchange to only as much currency as you need. 

Sure, although this might come with its own disadvantages, such as having to pay an exchange fee again when you’ve run out of foreign cash, smart and accurate budgeting will help you ditch the possibility of confronting such a dilemma.

In particular, to avoid having to exchange currencies more than once, it’s best to have a fair estimate on how much you’ll be spending for your overseas travel before visiting the nearest currency counter. 

Start by creating spending categories, such as hotels, meals, etc., and then designate how much money you’ll be willing to spend on each category. Once done, add everything. The total amount will serve as your base for exchanging currencies.

Avoid Currency Exchanges at Tourist Spots

Here’s another tip: When trying to exchange currencies, the most convenient counters aren’t the best bets to have. Essentially, this is because exchange counters that are easy to access tend to maximize the convenience they provide by implementing more expensive rates to customers. 

These include exchange counters located on major tourist areas and international airports. If you want to cut off additional costs, you may want to walk a little bit more and try to find exchange counters that provide the best exchange rates

Sure, while this might not promise convenience, it will help you save a considerable amount of money.

Try to Stick With Cash

While it’s important to always keep your debit and credit card with you, it’s important to take note that using foreign cash should still be your first option when completing transactions. Essentially, this is because cash is likely to be the cheapest mode of payment. 

Compared to plastic, paying with cash won’t subject you to surprise fees and charges. Moreover, cash also presents convenience, as it is accepted everywhere; unlike credit cards that rely on technology.

International Finance: Tips for Exchanging Currencies

The Bottom Line

Ready to fly to your dream destination? Before you do, be sure to take note of these 4 effective tips on international finance. Make your research as early as today, discover the best exchange rate offers, and know the dos and don’ts by turning to this expert guide.