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Don’t Go To An Airport Exchange to Buy Foreign Currency
If you intend to travel overseas for business or pleasure you will have to exchange your money at some point. There are dozens of types of currency across the globe, the American dollar is not the only medium for purchasing! If you wait until you are overseas and attempt to withdraw money from your account using an ATM or even a credit card you may find that when you buy foreign currency the exchange rate is exorbitant. Therefore, when preparing to travel one of the tasks you need to attend to is buying foreign currency at a bank or other financial institution.
Now, you should note that no matter where you go to make the exchange you are going to be charged for changing your money from American currency to that which is used by other countries. The reason for this is simple. It costs money to exchange money or it costs money to buy foreign currency. This is by no means a free transaction. Your bank or financial institution here in the United States will charge a percent of the exchange rate perhaps, as would a bank in a foreign country.
That is because currency exchange is a market unto itself. Buying foreign currency is actually a highly sophisticated economic process and the amount of currency that is traded worldwide on a daily basis has been estimated to go as high as five trillion dollars! That’s right – $5 trillion. With figures like that it is not hard to imagine that a small, single transaction by one customer would not receive a markup. In light of this the traveler should educate him or herself a bit before stepping into a bank to make the exchange. This is not as difficult as it sounds. There are many sites like XChange of America that will explain how to buy foreign currency in a way that will save you money or at least guarantee that you get the best rate possible.
There are several dos and don’ts that will help you get a better foreign currency exchange rate. For example, just like everything else at the airport – it is more expensive to make the exchange there. So, that is the last place you want to make the exchange. Too, when you are traveling overseas you will get a better foreign exchange rate if you use cash for transactions than if you use a credit card or withdraw money from your ATM.
In each of these cases – everybody is taking a little bit of your cash – the bank that you are withdrawing the money from at their ATM, your bank at home or your credit card service if you choose to purchase that way. And each of these organizations is tacking on the cost of the foreign exchange rate as well as regular fees – and that exchange rate is going to come at a premium price for convenience. So, if you need to buy foreign currency – take the time to find out more about it prior to setting off on your business trip or vacation. It will be like money in the bank.