You can only know the value of something when it’s gone. And when it comes to hard earned money, we certainly don’t want to learn it the hard way. As far as we better manage our finances before it’s too late, Travelers often end up losing a lot of money while traveling abroad, especially when they go to Foreign exchange.
It has long been a dilemma for me Should foreign currency be exchanged at the airport or not?We’ve gone a mile ahead to demystify what all the fuss is about, and here’s what you should know before planning another international trip.
content list
- What happens when exchanging foreign currency?
- How much do you lose when exchanging forex?
- How do you lose money while exchanging forex?
- Where should not exchange foreign currency?
- Where should foreign currency be exchanged?
- Forex exchange tips
What happens when exchanging foreign currency?
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How much you lose depends on how much you need when you go to Foreign exchange. If the amount you need to exchange is small, the foreign exchange rate won’t be a problem. You will only notice the difference when exchanging for a larger amount. But the fact that remains the same is that you end up losing an amount of money when exchanging it without proper research on where and where not to exchange.
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How much do you lose when exchanging forex?
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On average, travelers lose a minimum of 6 to 8 percent and a maximum of 12 to 15 percent while Foreign exchange in different forms. For example:
- In Europe, you end up losing about 8 percent converting dollars into euros or other foreign currency at a bank.
- When exchanging currencies from popular kiosks such as Forex and Travelex which are easily seen in airports, you may end up losing about 15 percent of the money you need.
How do you lose money while exchanging forex?
There are many ways travelers lose their money and ways that are still unknown to them. Chances are also high that travelers may be aware of ways to lose an extra while they are there Foreign exchange But the margin is so small that it is often not noticed or ignored.
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Hence, here are some of the ways in which you may lose your money when exchanging currencies in India and other countries as well:
- When exchanging foreign currency at airports, travel kiosks, etc
- As part of the facility fee at banks
- High exchange rates in foreign currencies
- Transaction fees at ATMs abroad
- Exchange from unauthorized dealers
- Interest rates on swiping credit cards abroad
- While exchanging currencies that usually have higher values such as British Pounds, Euros and US Dollars
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Where should not exchange foreign currency?
1. Airports
If ever there is a worse place in the world Foreign exchange, must be airports. Not only Currency exchange at the airport Take advantage of your shortfall, but they plan up front to charge you more because the number of travelers who end up making last minute transactions is very high.
The exchange rates are sky-high and there is no point in comparing different stalls as they will all offer similar exchange rates. Hence, make sure you exchange your currency in advance before reaching the airport and keep this option as a last resort. Currency exchange at the airport It is the safest way of exchanges.
2. Local markets
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The moment you think you have made a smart decision not to exchange foreign currency at the airport, you end up in a different mess. Sometimes, travelers end up in local markets which are usually near airports where they find many unauthorized dealers.
When it comes to exchanging cash, understand that no matter how much you negotiate, you will be the only one who will incur losses in the end. Hence, beware of those local agents or dealers who are always ready to scam you into exchanging foreign currency with them.
3. Banks abroad
The main problem with banks whether in India or abroad is that most banks may refuse to exchange foreign currency if you do not have an account with them. Hence, in such scenarios, they prefer to do the transactions via card so they charge convenience fee for that as well.
Where should foreign currency be exchanged?
Whatever the destination, exchanging forex in government institutions is always fruitful. Whether it is India, or any other international destination, be sure to try your hand at currency exchange at national post offices, and government banks which usually have better exchange rates than private dealers.
Forex exchange tips
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- You don’t have to wait for your travel appointment to Foreign exchange. Obviously, you will plan your trip well in advance and you can also exchange foreign currency simultaneously.
- get used to 30/70 practice. While it is important to carry some cash, it is always a good idea to carry cash and cards in the ratio of 30:70 respectively, to better manage finances.
- Always compare. Do not believe in word of mouth when you are about to exchange foreign currency. Always compare rates with several merchants, on different portals and on different dates to find a better exchange rate.
- Avoids Overuse of your debit and credit cards. Although you may be a pro at increasing your credit score, using an international credit card and debit card too often can lead to unnecessary convenience fees and transaction fees that can also add to the interest rate you pay as a Exchange rates may fluctuate at any time.
- While you are doing your forex exchange in India, make sure to confirm that the merchant you are dealing with is RBI accredited stakeholders.
- money transfer is the key. While cash, credit and spending may be limited to a certain amount which varies from bank to bank, payment for your transactions via… NEFT/RTGS May bring you a better deal.
- digital wallet is the future. Online payment gateways such as PayTM, Mobikwik, and PayU They are some of the leading digital platforms which are used for every other transaction in India. Hence, use it while the time is still right.
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Realized what you’ve been doing wrong all this time? Well, if not, we’re sure a message of caution was conveyed for better handling in the future. And if you still feel like we’re missing something, feel free to share your views and opinions with us in the comments below!
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