How to Avoid High Currency Exchange Fees

 

How to Avoid High Currency Exchange Fees

If you travel repeatedly then you probably engage in currency conversion a lot; and every time you do, your bank tries to rip you off as much cash as they can in the process. Even worse, currency exchange rip-offs at airport currency booths can cost travelers more than 400 dollars for every 1,200 dollars they exchange.

If you are not careful enough, you might pay fees and interests that cancel out your savings. Here are numerous ideas to help you evade unreasonably high exchange rates.

1.           Research on the different types of foreign ATM fees

Most ATMs usually charge fees. And in most cases, these fees vary if you are not a member of the respective bank. To ensure you avoid unnecessary hidden fees, research and find out every foreign bank linked with your local bank.

However, also note that some banks charge fees and interests to every user.

2.           Exchange currencies before leaving for your excursion

If you are yet to pack your bags, spare some time and hunt for the best exchange rates. Here are numerous recommended spots you can exchange currency. I have arranged them from the least to most expensive.

•         Check with your bank or credit union

•         Order cash via an online currency converter

•         Use airport currency booths, stores, and kiosks (Last resort)

I recommend Banks and credit card unions because they offer the best exchange rates and won’t charge irrational fees to exchange currency.

In case you are out of options, but would still like to exchange currency prior to leaving for your trip, try out airport kiosks and stores. However, kindly note that their exchange rates are generally low, and fees are high and numerous. Avoid this option at all cost.

3.           Find out if your destination is “cards” friendly

Research and find out whether your final destination is credit or debit cards friendly. In case it is, avoid currency exchange fees with “no foreign transaction fee” debit and credit cards.

Plan and apply for one of these cards before leaving for your trip and consequently use them instead of cash wherever possible. Kindly avoid using your “no foreign transaction fee” cards on foreign ATMs because you’ll be charged huge interests and fees faster than you can say Banana.

If your predetermined destination is not card friendly and only operates more in cash, refer to advice no 2 and exchange currencies before leaving for your trip.

4.           Find and use a reliable currency exchange company

If you are exchanging $5,000 to $100,000, avoid huge fees and only incur approximately 0.5% interest by choosing and using any of the following currency exchange firms:

•         TransferWise

•         OFX

•         CurrencyFair

•         Xe.com

This is how these companies operate;

•         You transfer (either through wire transfer or ACH in the United States) your funds to one of their bank accounts, and they direct or wire transfer the same amount to your account, but in an exchanged currency.

Usually, this implies you’ll need a bank account with two distinct currencies. To simplify this, open a bank account with various currencies.