Every time you use your card overseas, your local bank converts the transaction into your local currency for billing purposes and take a little off the top for doing so. Thus the official rate you see online is not what you actually get. That’s the interbank rate and unless you become a major bank, you’re not going to get that rate. All we can do is get as close as we can to that rate. To avoid getting on the real losing end of conversion, follow the following tips:
1. Exchange with Travelers: While this is definitely the cheapest way to exchange foreign currency, it’s not something you’ll be able to do all the time. Usually when leaving or entering a new country, you’ll find fellow travelers heading in the opposite direction. This is a great opportunity to trade currencies with each other. There are zero fees involved, unless one of you can’t provide exact change…
2. Credit Cards: Credit cards will give you the best exchange rates — slightly better than using an ATM. But you start paying interest immediately and there are service fees. Depending on where you’re traveling, many businesses only except cash.
3. ATM Machines: Using your debit card to withdraw cash from an ATM is the best thing to a credit card. Exchange rates are very competitive, and ATMs are available all over the world. Insert the card from your home bank, and instantly receive local currency to use as cash. Exchanging money using an ATM is both super convenient, and relatively cheap. If your bank refunds ATM fees or doesn’t charge any to start with, it’s the best option out there.
4. Currency Exchange Booth: Don’t change money at airports – most exchange bureaus in airports are so far down the financial food chain, they don’t have the clout to offer good exchange rates. Use only when you absolutely have to. Some currencies (Bhutan) can’t be exchanged anywhere. Sometimes your only choice is to use airport exchange booths.
Also avoid using the company Travelex at all costs – they have worst rates and fees. Avoid their ATMs too! You’ll often see these places at airports or bus terminals. They offer terrible rates, and there is always a commission of some sort tacked on. Even if their sign says “No Commissions”, the exchange rate they give is padded to make a tidy profit off your ignorance.
5. Money Changers: If you thought currency booths were bad, these guys can be even worse. You’ll find them hanging out around international land borders. Sometimes it’s an outright scam. Taxi drivers will take you to the country’s border, where you’ll need to get out and jump into another taxi, but this 2nd taxi won’t take the last country’s currency. If you’re not prepared, this can force you to use the local money changer who just happens to be waiting with an absolutely horrible deal. If you find yourself in this situation, make sure to count the money you receive twice, and check for counterfeit bills before you hand over your cash.
Some tips for changing money on the street are: In some countries, these are to be avoided (Myanmar comes to mind), but often they are the only means to change money and often give the most competitive rates. Here are some rules:
• Use an app like xe.com to figure out the official rates. You will often not bet that rate but it gives a guideline. Get the rate for both US$ and Euros if you have both or a choice. In west Africa, either one may get much better rates depending on the country.
• Determine if this is a black market money country (Venezuela, Uzbekistan, Nigeria, Angola come to mind). If it is, never use an ATM or credit card and bring all your money as cash, and more than you think you will need. Everything you buy, including tours will be purchased at black market prices. And the rate may change, in very fluid economies, very quickly even on a daily basis and may be different in different parts of the country.
• Have a calculator or phone with a calculator to make your own calculations.
• Have a notebook or paper to keep track of everything: start with the official rates and expected rates when not changing $ or €. On paper, write down the rates and how much you are going to change and figure out the resulting amounts.
• When dealing with the money changer, always work from 1US$ or 1€, not from what you are changing. That’s the only way to be able to compare. You may decide to change the amount you want to change depending on the rate. Language can pose problems in getting this figure.
It also gets confusing when changing from one countries currency to another when they are not $ or €.
• If there is a group, separate one changer at a time and deal with only him. But it is compulsory to check several, including many of the businesses around, as they will often change money too. Stay away from groups – it only gets confusing.
• They will want to take your money, but never give it to them. Keep it in a safe pocket and simply write out the amount you want to change. Many are slight of hand artists, or you may simply forget they have your money. This is especially in a group or with more than one, as things can get distracting.
• Shop around. Get quotes from several changers in the group, along the street and in the businesses.
• Only bring newer notes, for example nobody will change older, small faced, pre-2006 US bills. Avoid bills with tears, writing on them or that look well used and old. Having perfect, uncreased notes is not necessary in most countries in 2017.
• Try to change the largest bills you can. 100 denomination notes will always get the best rates, usually the same as 50 denomination bills. Sometimes it doesn’t matter but the difference can be appreciable. Larger bills take up much less space.
• Walk away easily and quickly especially if the quoted rate is way out of line or the guy is too high-pressure. They will almost always return with a better rate.
6. Changing on the Street is only worthwhile rarely. In the event of a black market exchange rate, changing where you are staying, at a travel agent or other established business is the best bet. Only change money on the street where you can see it is day-to-day practice of locals and not in large amounts. In West Africa (Morocco to South Africa, this is by far the most common method to change money, and generally they are reliable here.
Some tips for exchanging money on the street are. In some countries, these are to be avoided (Myanmar comes to mind), but often they are the only means to change money and often give the most competitive rates. Here are some rules:
• Use an app like xe.com to figure out the official rates. You will often not bet that rate but it gives a guideline. Get the rate for both US$ and Euros if you have both or a choice. In west Africa, either one may get much better rates depending on the country.
• Determine if this is a black market money country (Venezuela, Uzbekistan, Nigeria, Angola come to mind). If it is, never use an ATM or credit card and bring all your money as cash, and more than you think you will need. Everything you buy, including tours will be purchased at black market prices. And the rate may change, in very fluid economies, very quickly even on a daily basis and may be different in different parts of the country.
• Have a calculator or phone with a calculator to make your own calculations.
• Have a notebook or paper to keep track of everything: start with the official rates and expected rates when not changing $ or €. On paper, write down the rates and how much you are going to change and figure out the resulting amounts.
• When dealing with the money changer, always work from 1US$ or 1€, not from what you are changing. That’s the only way to be able to compare. You may decide to change the amount you want to change depending on the rate. Language can pose problems in getting this figure.
It also gets confusing when changing from one countries currency to another when they are not $ or €.
• If there is a group, separate one changer at a time and deal with only him. But it is compulsory to check several, including many of the businesses around, as they will often change money too. Stay away from groups – it only gets confusing.
• They will want to take your money, but never give it to them. Keep it in a safe pocket and simply write out the amount you want to change. Many are slight of hand artists, or you may simply forget they have your money. This is especially in a group or with more than one, as things can get distracting.
• Shop around. Get quotes from several changers in the group, along the street and in the businesses.
• Only bring newer notes, for example nobody will change older, small faced, pre-2006 US bills. Avoid bills with tears, writing on them or that look well used and old. Having perfect, uncreased notes is not necessary in most countries in 2017.
• Try to change the largest bills you can. 100 denomination notes will always get the best rates, usually the same as 50 denomination bills. Sometimes it doesn’t matter but the difference can be appreciable. Larger bills take up much less space.
• Walk away easily and quickly especially if the quoted rate is way out of line or the guy is too high-pressure. They will almost always return with a better rate.
Money changing tricks
Money changing tricks are one of the easiest way to get burnt whilst abroad, especially if doing so on the street.
1. Your original money could be returned to you as a fake or lower domination note when the deal is voided by the changer. If you are worried you could make a note of serial numbers of larger bills before you pass them over to make sure you get back the original. When you are handed back your money, do not return theirs until (no matter how much they try to fluster you) you establish that the carefully folded $100 bill is not a $1 bill – it’s easily done.
2. Be wary of receiving money no longer bank recognised or carefully folded to deceive.