All travellers regardless of how thick their wallets are would like the Biggest bang for their buck. making your holiday budget stretch further as currency exchange rates not only fluctuate from day to day, but also from provider to provider. The three most popular options are: Either you use a special travel card, or your VISA or Mastercard, or you exchange foreign currency before the journey starts. These are some tips on how you can get the best exchange rate on your travel money:
Shop around for your holiday money
Currency exchange rates not only fluctuate from day to day but also from provider to provider. Prices are not the same across the board so it’s extremely important to shop around for the best exchange rates before you purchase. Don’t wait until you get to the airport, your hotel or foreign banks, as these will usually charge more commission.
Watch out for credit card fees
Although it’s easy to walk into a bureau de change and whip out a credit or debit card to buy travel money, it’s seldom the best value, as some cards tack on extra fees. Each card provider or bank has a different policy with some banks offering cards with travel incentives like zero foreign transaction fees and low interest on cash withdrawals abroad.
Remember that you must inform your bank before going abroad if you plan on using your credit card for transactions.
Pay in Local Currency
If you choose to use a credit or debit card for some of your purchases abroad, always ask to pay in local currency to avoid something called a ‘dynamic currency conversion rate’ which businesses will apply to convert your purchase into your local currency.
Prepaid Travel Cards
Another alternative to carrying bundles of cash around is a locked‘ at the exchange rate on the day you bought the card, and it won’t fluctuate as you spend, like using debit or credit cards. Although these options make it easy to pay in different currencies, the reality is that travel cards often involve fees when you upload money or withdraw it again.
You can withdraw money from any Mastercard ATM, which will cost a fee depending on the exchange rate. Also consider there may be a once-off cost for the card, which differs from bank to bank.
There may be restrictions on the currencies available.
Cash
Having your cash exchanged for another currency before you leave means you know exactly what you pay for commission and at which exchange rate you exchanged the money.
Which is the better option?
It is always wise to some cash with you and to still activate your credit card before travelling. Please do the homework and consider the different price structures and choose the option that will work the best in terms of what you are willing to pay for card security, what would be the most comfortable and how many transactions you plan on making.
If you plan on making large transactions, a travel card is the best option as the fee would not be calculated on the percentage of the transaction amount. It also depends on the fee percentage charged when you upload money to your travel card. You may pay a bit more per transaction with your bank card, but you save on the travel card purchase fee.
