How To Get The Most Of Your Money When Traveling
By Victor Siu, Thu Dec 8th
How to get the most of your money when traveling
By Victor Siu
When traveling to another country, there are several key ways toget the most out of your money. Among the most effective methodsis timing your travel right: taking advantage of a favorableexchange rate can considerably enhance your buying power. In thereal world, though, a plethora of arrangements to be made andtickets to be bought may inhibit the luxury of planning travelmonths in advance. But even if youre planning your travel justa month or even a week in advance, there are still ways to besmart about your money. To minimize losses when converting toanother currency, finding a good place to change your money iskey.
Long-Term Planning
Plan to travel when your money is worth relatively more in thecountry you are visiting. Every country has a fluctuatingexchange rate so that there is balance in the supply and demandof currency. Timing your travel correctly, therefore, can make asignificant difference in the amount of spending you do.
A clear example of a fluctuating market is the euro to US dollarexchange rate. In year 2002, each euro was worth $.83. Now, inJuly of 2005, each euro is worth an upwards of $1.2059, meaningthe euro increased more than 31% in three years. This favorablerate of exchange for the euros makes traveling to the US a muchmore favorable deal in 2005.
Two ways to see if traveling to another country is a good deal,then, are to look at historical data and anticipate the future.You can easily check the historical rate of a pair byvisiting a foreign exchange news site and pulling up a yearlychart. A good website for this is DailyFX (www.dailyfx.com).Having an inkling about the future direction of the exchangerate may prove more challenging, but it is not impossible.DailyFX has fundamental and technical news reports to guide youin this respect.
Short-Term Planning
When travel plans are made in the short term, the key tomaximizing buying power is finding the right place to changeyour money that is, getting the best rate for the time thatyou are traveling. It is essential to do research in advance,namely, checking the rates at domestic banks, credit cards,foreign banks, and ATMs.
At Home At home, you can contact your local bank teller and askabout changing your money to a foreign currency. Experts suggestto only change enough to cover travel costs until you aresettled at your destination though, as the costs of exchangingmoney at home can be prohibitive. Another service available isan online money exchange, which
will take your funds and sendthe converted money to your home. The risk posed in this serviceis the safety of your funds during transportation.
In most instances, asking your credit card representative aboutexchanging money is the best approach to getting a greatexchange rate. Credit card companies have access to better ratesthan individuals and often deal in more than one currency. Oneprecaution to take, nonetheless, is to check if your homecurrency is losing value, since not all transactions areconverted instantly. Be cautious of the possibility of receivinga lower than expected rate several days later.
Abroad While exchanging money after arriving to a foreigncountry is the most convenient option, the obvious risk is thelack of options. The quoted exchange rate given may bedetermined purely by supply and demand, meaning that you willend up with a price close to what is being quoted in the foreignexchange market globally. The government of the country you arevisiting sets the exchange rate, which must be offeredby anyone who is changing money; and a mark-up in the rate isinevitable. An easy way to see if changing money in a foreignbank is a favorable decision is to compare ratesbeforehand in a local newspaper.
ATMs of a foreign country may also be a convenient way to obtainlocal at a reasonable rate. Keep in mind, however, thatyour withdrawal may be subject to a fee from both the foreignand your local bank. Another precaution to take is to tell yourbank of your travels, as they often freeze cards if out of theordinary transactions take place. As an illustration, if youmake withdrawals in four different countries over the course ofa week, your bank may see this as a red flag and for security,immediately lock all transaction of funds.
Getting The Most Out of Your Money Now
Getting the most of your money is a tricky task if you areunaware of all the options, or have trouble finding goodresources. A quick and easy way to decide which of these optionsare right for you is to firstly, talk to as many people as youcan (such as your local bank teller and credit card company),and secondly, obtain rates from the listed options and comparethe quotes with one another. As another alternative, you cancompare your obtained rates with the market rates quoted at GoCurrency.com(www.gocurrency.com), a converter that offersup-to-date exchange rates for over 150 world currencies.
About the author:Victor Siu is a contributing writer for GoCurrency.com. GoCurrencyprovides information on global exchange rates,movements and news related information.
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