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Traveling to a foreign country may require you to incur significant costs. Don’t strain your budget by incurring high exchange fees. Additionally, some institutions have restrictions and lengthy processes for exchanging currencies.
Make the trip more enjoyable by preparing your finances before the trip. If you need to exchange currency abroad, you need to know the best places. Benzinga has every angle covered by providing you with the best strategies, locations and alternatives to trade Forex.
The best places to exchange currencies
Several places have a history of being market leaders for currency exchange. These institutions make currency exchange convenient, affordable, and efficient. Knowing these places will help make your trip more enjoyable.
Avoid the hassle of dealing with foreign currency points of sale by exchanging money at your local bank. Exchanging currency before you depart gives you peace of mind that you’ve taken care of one of the most important aspects of travel: finances.
The advantage of dealing with your bank is that you have a customer history. This could entitle you to discounts and avoid long processes since the bank holds your personal information. Your local bank usually offers reasonable exchange rates and the lowest fees.
Having an account at a local bank allows you to make an appointment online to ensure your desired currency is available upon arrival. Local banks have several branches near your home, giving you easy access to employees who speak your language.
Many local banks offer a wide range of currencies. Bank of America exchanges over 100 currencies and Wells Fargo quotes 70 currencies. Another benefit of many local banks is delivery. Some banks deliver foreign currency to your home for safety and convenience.
Ordering foreign currency from your local bank well in advance of your trip may qualify you for special rewards such as Bank of America Preferred Rewards members receiving a 2% cashback and free shipping for online foreign currency orders and mobile.
Major banks such as Chase and Bank of America offer ATMs overseas. This allows you to withdraw local currency from your US dollar account.
Another handy place to exchange currency before you leave is a credit union. Most credit unions offer over 100 foreign currencies. You will get much better rates and fees trading at a cashier than at a foreign institution.
Most credit unions don’t have minimum or maximum dollar requirements, but you can’t exchange foreign coins. A credit union allows you to request delivery to your home and resell the foreign currency.
You can also save up to 3% on overseas credit card fees with select credit unions. After exchanging currencies, you can withdraw the funds from your cash account.
An online office gives you the ability to transact via your desktop computer or a mobile app. The added advantage is that these institutions are located in several countries and popular destinations.
Some online offices will refund you the difference between another institution’s lower overall price and their offer if you can prove a cheaper alternative. They allow you to collect the money at an airport several hours after placing your order. The other option is for the online office to deliver the money to you.
Using a credit card abroad is a form of currency exchange. It allows you to buy goods and withdraw money in a foreign country. Your bank uses the spot rate at the time of the transaction to deduct the dollar equivalent of your foreign purchase.
To avoid transaction fees, you must subscribe to a credit card with no foreign transaction fees. A debit card with no foreign fees is also available. Major banks such as Chase, Capital One and Bank of America offer such cards.
Using cards is safer than cash and avoids the hassle of physically exchanging currency; your bank does it for you. Another benefit of a card with no transaction fees is its fraud protection feature. Stolen or lost credit cards are easier to replace than cash.
Avoid using your card for a cash advance to obtain foreign currency. Fees for cash advances are exorbitant and high interest starts accumulating immediately.
Should you keep foreign currency?
Holding a foreign currency is a way to diversify your portfolio. It ensures that you spread your risk over several countries. This can help you take advantage of changing world conditions.
Your foreign currencies could strengthen against the dollar, allowing you to exchange them to receive more dollars. Rising inflation, low interest rates and money printing in the United States are some of the reasons for the potential weakening of the dollar.
Recent geopolitical events have shown that you might need to emigrate to a foreign country to ensure your safety. In such cases, you may not have the opportunity to exchange local currency for foreign currency to flee.
Another advantage of investing in foreign currencies is that you receive information on variables in real time. Insider trading is less common in the forex market than in stocks. Cash flows determine currency valuations, allowing you to analyze events that may impact the value of a foreign currency.
The Worst Places to Exchange Currency
Some institutions make the change difficult and expensive. In some cases, they have so much red tape that it’s impossible to exchange currency if you don’t have all the required documents.
To avoid headaches, there are certain places you should avoid when exchanging currencies.
1. Airport kiosks: Avoid airport exchange kiosks as they offer worse exchange rate than your local bank. Additionally, you may incur high transaction fees and commissions.
2. Traveller’s cheques: Many places do not accept traveler’s checks because they are expired. Although you can use them, be aware of high foreign transaction costs and ATM fees.
3. Money Cards: These are similar to travelers checks as they are prepaid. Expect to pay high fees for purchases and withdrawals. The only advantage of using a bank card is that some institutions offer 24/7 support, allowing you to access cash in case of emergency if your card is stolen, lost or damaged.
4. Street vendors: People in some countries target popular tourist attractions and offer tourists foreign currency. To attract customers, they offer better rates than legal entities. Using street vendors is risky as these people do not have the legal right to trade. In addition, they can offer you counterfeits.
Compare Forex Brokers Online
Finding a reliable online currency exchange means you have to scour the market. It takes time and investing with the wrong broker is risky. Benzinga has made your search more convenient by listing the best online forex brokers.
Frequently Asked Questions
When can I sell foreign currency?
When can I sell foreign currency?
You can trading in the foreign exchange market 24 hours a day, Monday to Friday. This applies if you trade forex with a broker. If you want to buy or sell foreign currency, you will need to check with your local forex institution for working hours.
Your local bank will be the best option to exchange foreign currencies after your trip abroad.
Where can I exchange money free of charge?
Where can I exchange money free of charge?
It is difficult to find an institution that offers money change free of charge. Your best option would be to try a local bank. If you are a customer with a good track record, your bank may not charge you a fee.
Otherwise, you can reap certain rewards such as points or discounts by negotiating with your local bank.
FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), allows you to trade a wide range of foreign exchange markets as well as spot metals with low prices and fast, quality execution on every trade.