Posts Tagged ‘foreign money’

Traveling Budgets and the Currency Exchange

Tuesday, November 10th, 2009

When is the best time to exchange money for a trip?

Everyone has a different opinion when it comes to exchanging money. Some travelers believe that waiting until you arrive at your destination airport is the most efficient way to exchange money, but in today’s volatile global market that strategy can be expensive. The currency market is in a constant state of change, so a good rate today could turn into a budget breaker tomorrow. Most trips out of the country are planned in advance and travel budgets are usually a top priority in that planning process, so it makes sense to know how much your currency exchanges will cost you. A last minute large amount exchange at an arrival airport could cost an extra $150 for every $1000 you exchange if the dollar has weakened by 1500 points over the last few days.

The best way to exchange money is to exchange small amounts of money while you are planning the trip. When you average your exchanges you know exactly how much each exchange costs, so your budget is more realistic. Averaging protects you from a major shift in currency value, which can occur at any time with some trading pairs. Exchanging money before you leave your own country is a strategy that will make your travel budget work when you arrive in your host country.

Where should I exchange money?

Some travelers rely on credit cards when they travel not realizing that credit card companies use an exchange rate that includes their profit plus they add a surcharge to every travel purchase, so you never know how much you are spending until you get a statement. Banks add a fee to every currency exchange and the rate some banks use may not be a real time rate, which can cost you more than necessary. Airport currency merchants may have hidden fees in their posted rates, which add additional cost to the trip. The best way to exchange money is to use an averaging system in the planning process and get advice from a reliable currency trader who watches the market hourly. Forex trading can be complicated to the layman so a professional trader can help you make exchanges without extra fees, hidden surcharges or bogus rates.

Other travel points

It is a good idea to find out if your host country has cash limitations. If you are carrying more cash than the country allows it can be confiscated at a customs checkpoint. Always carry cash in a money belt or hidden pocket which is secure and out of sight. Carry a small amount of cash for incidentals in a purse or a wallet and hotel safes and other security measures should be used when you arrive at your destination. Common sense is always your best security tool when it is used.

The experts at ForexTraders.com provided this article to help you understand the importance of a strategy when trading currencies before traveling abroad. If you need more information about forex trading, forex brokers or margin trading and leverage accounts, please visit our website.