Are you planning an international trip but unsure where you need to exchange your money? Nothing is worse than getting hit with hefty exchange fees when you open your credit card statement a few weeks after you get home.
To avoid any issues, travelers should look to convert their money before going on any trips. The following are a list of places with the best exchange rates.
- Local banks usually charge anywhere from 4-5%
- Airports are 25%
- FX companies around 1%
Converting overseas
Trading currency overseas can be expensive. However, there are options if you don’t like traveling with lots of cash. Big banks like CIBC, TD, and Credit unions usually have ATMs in foreign destinations; however, be prepared to pay high exchange fees.
Going to a kiosk at the airport is likely the most expensive option as previously mentioned, as most airports charge 25%.
When you return to Canada, exchange any left-over foreign cash you have with your bank. Some banks won’t accept foreign currency, so you can always exchange it back to Canadian at the airport before you leave.
Using Credit Vs. Cash
Today’s world is digital, and most people don’t travel with loads of cash or traveler checks; it’s best to check with your bank to see if they offer a no-foreign fee debit card or no-foreign transaction credit card.
A no-foreign fee credit card will likely protect against fraudulent charges and only use cash when necessary for small transactions. Credit cards are replaceable. However, money stolen is gone forever.
With advancements in technology, most foreign destinations allow debit and credit transactions. Still, there are limitations, and you should research to ensure your destination offers this form of payment.
Using Foreign Exchange Companies
Forex brokers can offer more competitive rates to maximize the value of your currency transaction. Due to the following
- Foreign exchange markets provide traders with a lot of flexibility because there are no restrictions on the amount of money traded. Also, the market operates on a 24 by 7 basis.
- Information regarding forex markets is readily available, making it transparent. The size of the market also makes it fair and efficient.
- There is a wide variety of trading platforms available, and FX companies can trade in hundreds of different currencies.
Best Trading Platforms
- Forex markets provide an environment with lower transaction costs than other markets. The transaction costs of trading in Forex are meager than in other markets.
- Forex markets also provide the most leverage overall.
The Takeaway
Exchanging your currency at any airport or foreign destination will cost you 25% or more in exchange fees. Banks are a great second option; however, they still charge around 4-5%, and foreign exchange businesses can provide the lowest prices of about 1% on currency exchanges. Overall, it is essential to research different options, ensure your destination meets your foreign exchange needs, and plan accordingly to avoid disruptions.
