Save Money on Foreign Exchange while Traveling Abroad

by on January 4, 2011

When it comes to conversion of currency, our mental abilities start to shudder. All that matters is to get the best. But we need to scale ourselves through certain options available in order to keep our expenditure at its least possible level. Here, we bring forth the most commonly used options by travelers while shelling out money.

Do cards help avoid the conversion? Right card certainly ensures saving money when it comes to foreign currency. On the contrary, a wrong card can pose a serious threat. Cards have certainly ruled out cash to a large extent except for travel insurance. Beware of the catch in ‘commission free’ offers because the chances are that you will be making profit for the provider on account of worse exchange rate. After all, the whole world is playing the game of profit-making. Be cautious of the ‘dynamic currency conversion’. This can seem interesting to you but you will normally be hit with a higher exchange rate for this service, so never use it.

How about cheques? Travelers’ cheque is undoubtedly one of the most secure methods of carrying your money abroad. They help you abstain tension because you have to retain cheque number or make a photocopy, and make sure you don’t lose it. However, travelers’ cheques can make a hole in your pocket, as they are certainly not the cheapest way to carry your money abroad. However, with foreign currency travelers’ cheques you have to keep a tab on the exchange rate and look to transfer funds potentially well ahead of time. If you find a good rate, capitalize on it and if you are apprehensive then play safe and change half your money. And if you are a student, then you might end up having good deals, like free commission from the providers. Moreover, when cashing in cheques abroad you could have to bear with an additional charge. As with foreign currency, exchange rates for foreign currency travelers’ cheques constantly changes, so you have got to keep a tab on those.

A special travel credit card can spice up things your way but the fees and the interest rate should always be looked into. A credit card can fall back heavy on you, when it comes to cash withdrawals. Interest is incurred when your balance is not repaid in full. Despite the potential charges, if you shop around there are some fantastic credit cards to use overseas which don’t carry loading charges and have low ATM fees.

The credit card has an edge on cash because most of the credit card providers will supply a free replacement card. So if you misplace your credit card or it is stolen, contact your credit card company and it would be replaced. This offers a level of security that simply isn’t available with cash. One such example is Post Office Classic card.

The fresh available option is prepaid cards, which is a new phenomenon. The best part is that it’s safe, money back on fraudulent use of the card, no debt risk, easy accessibility and worldwide usage. However, due to lack of competition, there are a lot of fees to be considered, for instance: card application fees, ATM withdrawal fees, and charges for top-ups.

In a nutshell, quite a handful of options are at your disposal, but one has to pick as per the convenience and assurance. Obviously, one can’t let his hard earned money go down the drain.

{ 3 comments… read them below or add one }

chris March 18, 2012 at 7:58 pm

Carrying cash when traveling if for sure a no-no. Personally, I only carry a credit card, it’s a no-hassle for me since almost all establishments in different places around the world accept credit cards already. I also feel more secure, safe and protected when it’s a credit card I carry.

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Joan December 11, 2012 at 5:39 am

Are travelers cheques as widely used these days? I’ve always found these extremely secure when in unfamiliar countries but I fear they’re dying out. On my last trip to India we loaded rupees onto a travel card (http://www.icicibank.co.uk/personal/travel_card.html) and also good – no complains aside from the charges. We were willing to pay these just for peace of mind and security.

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Daniel Robert August 19, 2013 at 2:43 am

Quite helpful post for the people wondering how to carry money while traveling. Traveler’s cheques are a good option but prepaid card are far better than that. You can get good conversion rate with a security of your amount.

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