Travelling abroad can be an exciting and enriching experience, but it can also be a costly one. One of the biggest expenses when travelling overseas is the cost of foreign currency exchange. Whether you’re paying for a hotel room, buying souvenirs, or dining out, you’ll need to convert your home currency into the local currency. Unfortunately, this can lead to high exchange rates and hidden fees, which can quickly add up and eat into your travel budget. But don’t worry, there are simple ways to avoid these costs and get the best rates when spending overseas. Here are some of our top tips:
Plan ahead and research the best exchange rates
Before you travel, it’s important to research the best exchange rates and find the best deal. Compare the rates offered by different banks, currency exchange offices, and online providers. Some providers may offer better rates than others, so it’s worth shopping around. Also consider the fees and charges associated with each provider. Some may charge a flat fee for each transaction, while others may charge a percentage of the total amount exchanged. Either way, seeing what’s out there and what the going rate is is important from the outset.
Use a credit card with no foreign transaction fees
One of the easiest ways to get the best rates when spending overseas is to use a credit card with no foreign transaction fees. Many credit cards charge a fee of around 3% on all transactions made in foreign currencies. This may not sound like much, but it can quickly add up and cause your holiday budget to disappear quicker than you would like.
Instead, look for a credit card that doesn’t charge any foreign transaction fees. This will help you avoid these additional costs and ensure that you get the best possible exchange rate.
Avoid airport currency exchange offices
It is quite well known but worth reiterating that currency exchange offices at airports often offer some of the worst exchange rates. These locations are typically more expensive than other options, as they know that travellers are often in a rush and may not have time to shop around for the best deal. To avoid these high rates, be sure to exchange currency before you leave for your trip or use an ATM once you arrive at your destination. These options will typically offer better exchange rates and lower fees.
Use a multi-currency card
Another great way to get the best rates when spending overseas is to use a multi-currency card. These cards work like debit or credit cards but allow you to store multiple currencies on the same card. This makes it easy to switch between currencies and avoid conversion fees when paying abroad. When you use your multi-currency card to make a purchase, the card will automatically choose the best currency for the transaction, based on the exchange rate at the time or even more conveniently, based on your location.
Be aware of currency conversion traps
When paying for goods or services overseas, be aware of currency conversion traps that merchants may use to make more money – either intentionally or unintentionally. Some merchants (credit card machines) may use dynamic currency conversion which allows them to charge a higher exchange rate than what you would pay if you used your own credit card. Others may charge you in your home currency instead of the local currency, which may result in a higher overall cost. To avoid these traps, always check the exchange rate and the currency being used before you make a purchase. If you’re unsure, ask the merchant or seller if they offer a choice between the local currency and your home currency. Always choose to pay in the local currency wherever possible, preferably with one of the aforementioned multi-currency cards.
By following these tips, you’ll be able to get the best rates when spending overseas and save money on foreign currency exchange. Spending your money abroad should be an enjoyable experience not a stressful one, so make sure you follow these tips so you can get more bang for your buck when holidaying abroad!