Foreign Currency

A guide for travelers

by A.C. Higgens

You've bought your tickets, packed your bags, and are about to tour Egypt's pyramids, climb the Swiss Alps, and browse Turkey's outdoor markets. Or are you? If you have a poor understanding of foreign currency exchange you may find that the thrill of your vacation has vanished amid the frustration of not knowing where and how to get money. Worse, you may even return home to discover that you spent more than you should have on a "bargain" whose currency conversion you didn't properly understand. Here are the essentials that you need to know about foreign currency exchange in order to enjoy your travels.

  1. Be familiar with what the official foreign currency rate is for the country that you are traveling to. You can easily do this with a Google search or conversion. (i.e., $1 US in GBP). By knowing the official exchange rate before you go, you will be less likely to get ripped off when trading foreign currency.
  2. Decide if you need any foreign currency before you travel or if you will get it upon arrival. You can normally order the more common foreign currencies from your local bank a few weeks before your departure date. If you are traveling to a smaller country with currency other than the US dollar, the British Pound, the Euro or the Yen, try to find out which currency you will be most able to exchange. In the Balkans, for instance, you will find the Euros are preferred while within the former Soviet Union more people prefer to trade in dollars. Remember, if you are traveling with pounds, only those issued by the Bank of England are accepted at foreign exchange offices.
  3. If you decide to get money upon your arrival, be aware that foreign currency exchange rates found at airports and train stations are often lower than those found in other, city center locations. If you chose to get money using your credit card, you should inquire if your card charges fees for foreign currency transactions. While the exchange rates offered by credit card companies are normally favorable, their fees on overseas transactions may make your purchase more expensive.
  4. If bringing cash with you, decide between travelers' checks or cash. While travelers check offer security against theft, it is much harder to find an exchange office that will accept them and they may even have a lower foreign currency conversion than cash. If you bring cash, make sure you have new bills that are unmarked and undamaged.
  5. Never trade in foreign currency anywhere or with anyone who is not working in an official exchange office or bank. Scammers abound who may promise you a very favorable rate for your currency. Remember, if it is too good to be true it probably is. If you don't know where a bank or an exchange office is ask, but be discreet. Also, hotels often trade in foreign currency, though normally at lower rates. If possible, try to exchange your money at locations that don't charge commissions; it just makes it easier to calculate your exchange rate.
  6. When making purchases, keep in mind the exchange rate in order to properly convert the foreign currency into a price you understand. Foreign currency conversion functions are often standard accessories on your mobile phone otherwise you can follow this rule. If one unit of your native currency is equal to multiple units of the foreign currency, take the price of the item and DIVIDE it by the exchange rate. (i.e., $1 US = 25 Rubles. A video that is priced at 300 rubles actually costs 300/25 (or $12). If one unit of your currency equals less than one unit of the foreign currency then the price of the item should be multiplied by the exchange rate to get the price in your native currency. (i.e., $1 US = 2 GBP. A video that is priced at 6 GBP actually costs 6x2 or $12).

Remember these tips and you will find that you can navigate through any foreign currency need while traveling abroad. Now you truly are ready to travel.

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