7 important Tips for Currency Exchange When Travelling Abroad

Posted on: Mar 9, 2022 | 3 mins | Written by: HDFC ERGO Team

7 important Tips for Currency Exchange When Travelling Abroad

While flying abroad there are numerous things you have to plan for apart from just booking your accommodation and flight tickets like buying an international travel insurance policy and most importantly doing currency exchange. The procedure for changing your money from one currency to another quite be very tedious, however, if you follow some smart tips then you can do the exchange with ease and also avoid losing money.

Tips For Currency Exchange

Currency exchange is essential when travelling abroad, but it is important to be careful. Listed below are a few travel currency exchange tips that must be kept in mind:

1. Always Avoid No Fee Exchange Offices

Every tourist spot has a couple of exchange offices that don’t charge extra currency conversion fees. However, it would be best to avoid these places as the currency exchange rate is usually the lowest. So you’ll end up getting away a lesser amount compared to the places which have a fee. Better get your currency converted at a place where they ask you to pay some transaction charge but will offer you an excellent return that is valuable for your journey.

2. Exchange some cash before arriving in your next country

Sometimes, exchange rates are more favourable outside of the country whose currency you’re looking for. However, even if they’re not, it’s best to get some cash before arrival just in case your debit card doesn’t work or gets stolen.

3. Plan ahead

This can easily be done by checking the current exchange rates and fees charged for the countries where you are travelling. Determine whether you’re going to exchange cash, use a credit/debit card, traveller's cheques, or all three. Pre-authorise your card with the bank and the credit card company before travelling to avoid getting declined. It is crucial to get an international travel insurance policy for better coverage.

4. Find the best rates

Before the trip, check the current exchange rates on both exchange websites and the official website of the local currency. It is worth noting that the exchange located near an airport will generally have the highest fees. Get better rates from local banks by withdrawing local currency through an ATM; inform the bank first. If using cash, it is advisable to request small bill denominations necessary in the purchase.

5. Watch for fees

Generally, merchants pay a transaction fee to the credit card company for international transactions. With debit cards, there is also an ATM withdrawal fee feature. Like all other checks, the price of a traveller's check also depends on the place where they are bought. When you exchange currency, you should know what you are paying. Do not forget to consider how much you will need to pay in fees for each of the options available.

6. Keep receipts

When converting money, make sure to do so only at a legal bureau, and always ensure that you keep all your transaction slips. This serves as a record of the transaction that both the buyer and the seller have conducted, as well as the amount of cash exchanged in the event that the two of you have a disagreement later.

7. Protect your cash

One of the important currency exchange tips after the exchange is using a money belt, or a concealed wallet to keep the currency safe. The same holds true for all cards and documents. In terms of physical currency, spread out your cash so it is not all held in one place or a single country for that matter. Also to be safe and free from stress you should opt for international travel insurance for enhanced protection during your travel.

Best Places to Exchange Currency

1. Banks and Credit Unions

Big banks and credit unions that have relationships directly with other banks in other countries will generally give good exchange rates and minimum fees for services. To find out, visit your bank’s homepage or speak to a banker and inquire whether there are affiliations with any foreign banks.

2. Airport Kiosks

Most airports have money-changing counters after the checkpoint or sometimes even closer to the gate. They may also be a little more costly than banks, but they can be very handy just before or after flights.

3. Downtown Currency Exchanges

In large tourist or business-oriented destinations and in metropolitan areas, currency exchange offices are located downtown. Some of them deal in several currencies, while others could be opened and closed at different hours by banks. Before exchanging from these, always compare rates upfront.

4. Hotels

Some international chain hotels can change money upon request according to the management. This may be most comfortable if you have just arrived in a new country and have little money with you. Always ask about commissions.

5. Online Brokers

If you are dealing with a large sum, it may be worth using an online foreign currency broker as they may offer better exchange rates. Wiring of money before travelling and then withdrawing the same after you have arrived. There are a number of firms that offer money transfer services, try to look for those which have relatively low fees.

Avoiding Scams and Pitfalls

Here is how to avoid scams and pitfalls during currency exchange when travelling abroad.

1. Trustworthy Traders

Do not exchange money with individuals on the street or with any dubious-looking person; only exchange money at official currency exchange offices and kiosks located at airports, hotels, and accredited banks. Do not deal with individuals in the streets who offer apparently very attractive rates of exchange – it is a sign of a very big scam. The precise counting of the money before walking away should also be a common practice so that you do not end up with less than the agreed amount.

2. Savvy Strategies

Maintain receipts issued in exchange for currency. Before travelling, surf the internet for average exchange rates so that you should not be shocked as to what you get. Except for the first few days, only change the amount of foreign currency that you would require by the end of the day to prevent being left with some useless foreign currency. It might be advisable to try to get a travel credit card or a travel debit card with minimal foreign transaction costs. This kind of insight makes a whole lot of difference when one is aware of certain tips when exchanging currencies and the tricks that are commonly associated with it.

3. Stay Alert, Stay Safe

When choosing the vendors, counting money, studying the rates, reducing leftovers, and having travel insurance, most of the cryptocurrency exchange scams and nuisances can be avoided. Prevention is better than cure; therefore, being keen and wary is imperative for the protection of your money.

Conclusion

Using the currency exchange tips mentioned above, you can save a lot of money on local exchange rates and avoid getting cheated during the trip. Apart from doing some currency exchange before flying abroad, opting for a travel insurance policy is also advisable. It provides coverage for financial losses arising from theft, flight delays, luggage loss, or any other unforeseen event.

FAQ

1. What insurance am I supposed to take when I am going on a trip to a foreign country?

Medical insurance for emergencies during travelling or trip insurance for smooth going of the trip.

2. What measures can be taken to obtain better rates of exchange?

Look for the best rates for the money you need in cash, use a credit card when possible, and exchange large amounts of cash at a time.

3. What precautions should be taken to ensure that charges related to currency exchange are kept to a minimum?

To save yourself some money, do not use any currency exchange services found at airports, hotels, or those that do not declare all the extra charges you are likely to be required to pay.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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