When is the best time to exchange money?
Seasoned travelers use different strategies to exchange currency. Some travelers wait until they arrive at their destination before they even think about a currency exchange. On a two or three day trip that strategy might work, but for a holiday or an extended trip to another country that decision could be an expensive one. You usually have enough time to organize a trip and the exchange rate should be an important element in your plans. Waiting to exchange all your money at an airport location can create a number of surprises.
Let’s say you arrive in Delhi and want to exchange $1000 for Rupee. The last time you checked the exchange was favorable, but economic conditions have changed since then. The Dollar/Rupee trading pair moved 1300 points over the course of ten days and that change costs you an extra $130. Traveling internationally without exchanging money before your departure date could spell budget disaster. Exchanging small amounts of money while you’re planning the trip reduces the risk that is associated with a sudden shift in the exchange market. Averaging your exchanges also gives you an exact cost to use in your budget, so there are no surprises when you arrive at your destination. If you plan ahead you can avoid the stress that an unexpected currency rate shift can create and you’re able to implement a budget that is effective.
Where should I exchange money?
Most travelers assume that banks give the best rate of exchange. Banks charge a fee for every exchange and they may only post one rate a day and it may not be the current rate. Some travelers rely on credit cards to exchange money, which makes the credit card companies very happy. They use a their own rate which includes a profit and they add a surcharge on every travel purchase, so you never know how much you’re spending until you get the statement and by that time it’s too late to make adjustments. The best way to exchange money is through a reliable currency exchange broker. They can give you a real time rate, so you can average your trades and know up front how much each trade costs. Airport currency merchants can be used to exchange small amounts if the rate is in your favor, but it still may cost more than your average exchanges.
Other travel points
Some countries do put a limit on the cash you can carry. It’s a good idea to know that limit before you arrive. A random customs inspection may destroy the trip if custom officials confiscate your cash. Always carry cash in a hidden pocket or money belt that’s secure and out of sight. Purses and wallets should be used to carry small amounts for small purchases. Hotel safes and other security measures should be used when you arrive and common sense is your best security tool when you decide to use it.
Article submitted by ForexTraders.com:
Our experts analyze the currency market, so if you need additional information about forex trading, forex brokers or understanding currency pairs, please visit our website.
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Tuesday, August 18, 2009
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