How you exchange currency can have a serious effect on your budget when traveling abroad. Many travellers face the decision of whether it is better to buy currency in their home country or destination. Should you exchange money in home country or destination? Read on, as we provide you the answers to your question.
Factors and Rule That Determines Your Decision
Generally speaking, exchanging your money in the country of destination would give you a more favorable exchange rate. But you still need to consider factors like the country you are traveling to and the currency you want to convert. If the currency is common, then the exchange rate will be cheaper. That is just the simple rule.
For example, if you are traveling to Finland from the USA and want to buy euro, you will pay less for it in Finland because euro is a currency you will find everywhere in the country. You will get more euros for American dollars because they are valuable and rare.
Now that you know exchanging money in your destination country would be favorable, do you know exchanging money in your home country can sometimes be cheaper too? For example, if you are traveling from Australia to another country that is not a popular destination for Australians like Nigeria, Ecuador, and Tunisia. You might even find it difficult to exchange your Australian dollars. What you would need to do is an exchange in your home country.
Knowing which one is favorable under certain conditions, let’s take a look at the advantages and disadvantages of each option.
Advantages and Disadvantages of Exchanging Money in Home Country
Pros
• You will have time to relax without any worries of finding an exchange bureau on arrival at your destination country. It can be a headache finding an exchange bureau on arrival.
• You will be able to avoid unnecessary charges on your debit and credit card since you will not be making use of them to purchase in the new destination.
• It will ensure you are not stranded in the destination country especially if it is a country where your home country currency is not common or available for exchange
• It will help you from falling victim to scams that might want to take a better of you because you are new to the country.
Cons
• It is important you have some money to pay for trains, buses, or cabs and incidental expenses. But exchanging money in home country might result in you carrying a large amount of money with you. This is not sensible, and it can be risky.
• The exchange rate might not be favorable
Advantages and Disadvantages of Exchanging Money in Destination
Pros
• There is a bigger chance you will save money when you exchange money in your destination country. You would be paying less when buying foreign currency there. This advantage alone has over shadowed the advantages of exchanging money in the home country. Of course, everyone would love to get more while they pay less. Just as we have said previously, exchanging money in the destination is more favorable that is why we would always recommend it to you.
Cons
• You might fall victim to scams if you don’t know the real money exchangers and official exchange shops you can go to.
Tips for Exchanging Foreign Currency
1. Don’t change money in the arrival airport and your hotel. Commissions may be high, and rate can be poor. However, if you don’t have any other options, you can find airport ATMs, currency exchanges and even banks on many airports.
2. Change the sensible amount of money that would take care of your needs throughout your stay.
3. Be familiar with the buy and sell rate plus the bank exchange rate
4. Use official exchange shops and not those down the alleys
5. Make use of ATMs where possible; they can give a better rate. But don’t forget to keep some cash for the emergency purpose
6. Stay away from shops that offer rates better than the present internet rate. They might be trying to play some tricks
7. In case you don’t have the cash for a bus or taxi you can exchange a small amount at the airport
8. Don’t purchase using your debit card abroad
9. You can make use of traveler’s checks. It is a relatively safe, convenient and cheap method of exchanging currency
10. If you are exchanging a large sum of cash, try bargaining to get a discount
11. Avoid dynamic currency conversion because it offers lousy exchange rate and includes hidden fees
12. Exchange from a bank if you want to exchange a lot of cash, it might be the safest
It is important you exchange your currency for the destination country’s currency to spend money abroad. The exchange rate depends solely on your destination. Whatever your destination is it is the best you exchange your money in the country destination as you will get a better and favorable rate. But if your destination is any of the exotic countries, try to exchange in the home country.