One of the most important questions when travelling abroad is how to get the best currency exchange rate. With the bank fees constantly changing and world currencies in the constant flux, the question persists. Based on the destination and the purpose of the trip, you can use a mix of currency conversion methods suitable in your case. Here are some simple rules to follow.
Credit cards are best for large purchases like airplane tickets, hotel rooms, and restaurant meals. While at the destination, you can avoid foreign currency conversion fees, 2.5-3% of the purchase, you can pick up a foreign exchange free credit card. The Amazon.ca Rewards Visa is a popular choice for Canadians. Most of the travel rewards cards offer additional perks like travel medical insurance, lost baggage insurance, and trip cancellation as a standard benefit. It is highly recommended to call your credit card issuer before travelling to clarify all possible fees associated with currency conversions and travelling and to let them know about your travel plans to avoid service interruptions.
Debit and ATM Cards
Debit cards get the same great interbank exchange rate as the credit cards and ATMs are available in all major airports and cities all over the world. However, all withdrawals are subject to currency conversion fees, ATM fees and other possible charges from your bank or the local bank, which still makes debit cards one of the cheapest options. It is highly recommended to let your bank know about your travel plans and to check the back of your card to check the networks to be looking on ATMs when abroad.
It is a good idea to get some local currency before you get to the destination to sustain you the first 24 hours for things like a taxi to your hotel, a meal and other immediate expenses. This way you will have some cash if the airport’s ATM isn’t working and the exchange kiosk is closed. If you exchange money before you depart, you can take your time to do research and find an exchange office with the best rate, look for thee spread of less than 2.5% and no fees.
Traveller’s Checks and Prepaid Cards
Traveller’s checks provide more security than cash because they can be replaced in case of loss or theft within 24 hours. They provide a peace of mind and an emergency fund to fall back on in case of an emergency.Visa and Travelex offer prepaid travel cards that work like credit cards for purchases and ATM withdrawals. Travelex even offers chip-and-PIN cards called Cash Passport available in different currencies. Traditional checks are also useful in case you don’t expect to find a functioning ATM. However, the exchange rate for traveller’s checks is usually no as favourable as the interbank rates you get using a credit or a debit card, and fewer merchants accept them for purchases nowadays. Moreover, you are charged a commission on top of the spread when you cash them in. Make sure to keep checks’ serial numbers separately from the checks themselves in case of a theft or loss.