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How to Buy Foreign Currency Quickly and Easily

Many Americans have never had the opportunity before to buy foreign currency. There have traditionally been a lot of reasons for this, like not taking many foreign vacations, or only wanting to use dollars for investment and savings. However, many of these old rules are changing and more Americans are looking to buy foreign currency. Before just jumping in and signing up with the first exchange or broker you find in the phone book or online, learn some tips about how to buy foreign currency quickly and easily.

Know the exchange rates

This is a very important point when you buy foreign currency. You must know the current exchange rates. Most of the time you can find a neutral website (one that is not looking to actually facilitate your purchase of paper money) that will give regular updates on exchange rates. From here, your provider of choice can be compared to the actual rate. Obviously when you buy foreign currency there is no sense in overpaying, so stay as close to the neutral exchange rate as possible.

Watch the spread

Just like when buying or selling stock, there is a spread with currencies. When you buy foreign currency, you can expect to pay a higher price to obtain the money and then a lower price when you go to sell it back. This is normal and how the broker or dealer makes their money. For example, you might be quoted 1.39 and 1.30 for the price of Euros, in dollars. That simply means that you can buy foreign currency at 1.39 dollars for every Euro and sell each Euro for $1.30. The spread in this case is .09 Euros. The dealer makes a profit of 9 Euros for every 100 that they exchange back and forth, or 9 percent.

Buy foreign currency online

In many cases, your supplier will allow you to buy foreign currency directly online (as well as in person). While this can be an incredibly convenient service, you still need to watch out for some things. You should never pay any additional fee to buy online. Also, make sure that the company has a strong reputation for successful dealings with their customers. This is what makes the Xchange of America a great place to buy foreign currency online; they meet all the requirements and always provide you with great value at the lowest possible prices. Contact XChange of America today for more information on how you can save money on your next currency purchase.

Tips for Leftover Currency After you Buy Foreign Currency

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After you buy foreign currency and complete your travels you’ll often be left with extra foreign currency. There is a lot that you can do with leftover foreign currency, and there’s no point in just letting it sit there or go to waste when there are plenty of uses for it. Here’s what to do after you buy foreign currency and have some extra left over after your trip.

Convert it back to your original currency

You can always convert foreign currency back to your original currency at a currency exchange, even after you buy foreign currency. The exchange rate will be based on the rate for that particular day, and although there may be a fee to convert it back, at least you will be able to use the currency in your home country. Even if you decide to travel back to the same country in the future you can always buy foreign currency for that country prior to your trip. You should definitely consider doing this if you buy a large quantity of foreign currency and find that you have more than what you expected left. You can convert foreign currency back to U.S. dollars and other currencies at Xchange of America.

Keep it as a souvenir

Foreign currency makes a great souvenir and you can keep a bill or coin of every denomination from your travels. Even if you buy foreign currency and then convert it back to your home country’s currency, you might still consider doing this. If you travel often, you can make a souvenir scrapbook with all of the different foreign currencies that you purchase included. Often times foreign currency will change some time after you buy foreign currency and the currency that you keep might end up being somewhat rare.

Don’t sell them at an airport currency exchange

An airport currency exchange will normally buy back any time of foreign currency that you bring back from your trip, but they generally offer very poor exchange rates. You are better off finding another purpose for the money you have left after you buy foreign currency. There are also plenty of local stores like Xchange of America that will offer you far better rates than most airport currency exchanges. If you aren’t sure, you should simply save your foreign currency so you don’t have to decide what you want to do with after you get back as long as you don’t have a large quantity of it.

How Exchange Rates Work When You Buy Foreign Currency

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If you buy foreign currency on a regular basis or travel to foreign countries, it pays to know a bit about how currency exchange rates work. For instance, the dollar regularly falls or gains against foreign currencies, and there are several factors that can influence this. If you travel to a foreign country, you cannot buy local goods with your country’s currency, which is why you need to buy foreign currency either before you travel or after you arrive at your destination. When you buy foreign currency the exchange rate is the amount of a foreign country’s currency that you can buy with a quantity of your own country’s currency.

An example of a currency exchange rate

For instance, if one U.S. dollar will buy you approximately 100 Japanese yen, the exchange rate is 1USD = 100JPY. The exchange rate that you get when you buy foreign currency is based on several factors including supply and demand, inflation, gross national product, foreign investment and other complicated influences. In general, the amount of a foreign current that you receive when you buy foreign currency is dependent on what the market is willing to pay for it that day. The exchange rate is one of the most important factors that determines how stable a country’s economy is.

Look up the exchange rate when you buy foreign currency

Before you buy foreign currency you should be sure to look up the exchange rate for that day, and you should know how much your currency is worth before you travel. Exchange rates are free floating which means that they constantly fluctuate against each other. A higher demand for a particular currency will cause the value or the price of the currency to increase, which means that you will be able to buy less of the currency with one unit of your own currency. If the value of the yen increases against the dollar for instance, the exchange rate may change to 1USD = 90JPY.

Consider currency exchange rates before you pick a country

Due to the fact that exchange rates fluctuate so much you may want to research which travel destinations will offer you the best exchange rate for your currency. For example, the dollar is currently high in value compared to the currency of several other countries such as Thailand, India, Costa Rica, Ecuador and others. These countries can be great destination choices as a result of this, because when you buy foreign currency with the dollar you will get a greater quantity of the country’s currency per dollar than other countries.

Online Money Conversion for Travel

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Travel or business trips abroad will always entail the need to tap foreign currencyexchange services. Online money changing service providers, in more recent years, have become a popular choice for those who are going overseas whether for business or leisure.

Even traditional banking institutions, which are known to be conservative in adopting newer technologies, have joined the bandwagon by offering Internet-based services related not only to foreign exchange trading but also to money changing. This is happening to the extent that some banking instruments, such as travelers checks, are slowly becoming used less and less by those taking trips overseas.

Indeed, the development of the worldwide web has changed so many past business practices, including changing from one currency to another. There are several drivers to the growth and widespread use of online currency exchange. Its diversity of uses is manifested in more than the advantage of having the facility to buy foreign currency of almost any country online.

The end-users of web-based portals on money changing have the leisure to compare prevailing exchange rates across many providers for this type of service. It is to the benefit of customers that changing currency has become a widespread endeavor among enterprising entities conscious of the business opportunities that the Internet revolution has spawned over the years.

Browsing through various search engines will return numerous websites offering services on currency exchange. With the slew of choices available, some comparison-shopping can be done in order to get the best value-for-money service. One thing is for sure, there is no monopoly in the money-changing business, and neither is there a cartel which imposes the amount ultimately charged to consumers.

By and large, free enterprise rules in currency exchange. The wide accessibility provided by the Internet has leveled the playing field in the business of currency exchange. Small business startups in money changing can now compete even with large enterprises, such as banks and credit card companies.

For this reason, it is advisable that before traveling overseas, some time has to be devoted in comparing the rates available among the outfits providing currency exchange facilities. The charges of these entities can markedly differ as they operate in varying business models some of which are more cost-efficient than the others.

An online money changer with greater cost efficiencies can thus package better offerings which will make their proposition a better alternative for travelers. Definitely, these are the service providers to go for when changing currencies. The mode of the transactions designed in their systems can be infinitely better, offering convenience and security, as well as appreciable rates.

Affordable Holiday Destinations for 2013

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Spending a vacation at an excessively expensive tourist destination would be counterproductive, as the vacationist would have to work with an unforgivingly low budget that’d prevent him from doing everything he wants to do; or blow all his money and go home broke, thereby causing more financial difficulties and even debt.

More people are starting to work around this issue by opting to buy foreign currency to increase their spending power. Americans and Europeans alike are pinning the value of their local cash against that of foreign money, and spending it the designated countries where they’ll get a longer stretch for every penny spent.

According to the Post Office Worldwide Holiday Costs Barometer – which compares in-resort prices for a shopping basket comprised of eight local items, including beverages, a pack of cigarettes, and a three-course meal for two – Spain has taken the number one spot as the cheapest holiday destination for Brits.

A recent survey indicates that the costs for eating outside at this tourist hotspot have been reduced by 50 percent in comparison to five years ago.

Approximately one-third of the 42 places to visit included in the survey have also witnessed a price drop, as the prices for goods or services sold at restaurants, bars and accommodations have dropped to notably lower levels. Greece serves as a perfect example for the reduction of prices, as the cost for a basket of goodies here have fallen to £57.50, thereby denoting a decrease of 18 percent.

Semi-favorable holiday conditions are noted in Barbados as well, as the barometer basket indicates a 26 percent decrease to £84.24.

For more affordable alternatives, tourists can always plot their vacations at the Czech Republic, Bali and Vietnam, wherein the basket prices are kept at the lower end of the price spectrum at £39.17, £40.47, and £43.20 respectively.

Although Sri Lanka witnessed a 27 percent increase, the island still manages to share the top spot along with Spain, as its weakened currency continues to fair poorly against the foreign money of the majority of countries.

Fluctuations in the currency exchange rates worldwide have made the option to buy foreign currency and spend vacations abroad much more appealing. Those residing in countries wherein their local currency does well against the holiday destinations listed above will be surprised at the significant increase of spending power they get to enjoy during their stay at any of these places.