How do I find a good exchange merchant?
Travelers have been exchanging currencies for years and many of them always wait until the last minute to exchange money not realizing that decision is an expensive one. Airport exchange merchants have been making huge profits for years in spite of the high rent they pay, because they know they have a captive audience that needs to exchange money in order to pay for transportation to the hotel and other arrival essentials. Some people even wait until they arrive at their hotel to exchange money and that?s always a budget busting experience. Hotels charge for the convenience and travelers never know it, because the profits are hidden in the posted rate of exchange.
Let?s say you?re planning a trip to Pakistan and you want to exchange Euros for Pakistani Rupees. The bank may post a rate of 1.00 EUR equals 123.614 PKR, but when the exchange is made the bank actually receives 135.698 PKR for every Euro exchanged. The difference is the bank?s profit, plus they add a transaction fee to each exchange, so the bank can pocket 10% or more depending on the real time rate. Credit cards do the same thing, but add additional fees and surcharges, so they can make over 15% on your money. Airports and hotels can cost you 20% in profits and if the currency rate has move a 1000 points since you arrived, it may cost you another 100 Euros for every 1000 you exchange.
The best way to get a good exchange rate is to use a professional currency exchange broker. A professional will give you a real time rate and will add a profit to it, but there are no extra fees or surcharges. A broker will help you average your exchanges, so you avoid sudden value surges that can destroy your budget, plus they will notify you when the market is moving in your favor. That?s important because of the time changes and the constant movement in currency values. You can find a good broker on the Internet, so you never leave home to exchange currency. Once you make an exchange, your money and a receipt will be sent to you using a secure overnight service.
When should I exchange currency?
The currency exchange market is a for-profit business and should be treated like any other business. Research should be done and rates and competitors should be compared before an exchange is made. The best exchange is an informed one where all the variables are known before the transaction is completed.
The best time to exchange a currency is when you?re planning the trip. When you average your exchanges, you can offset any major shifts in currency values that can ruin a budget. Exchanging small amounts of money with a broker, before you leave home, is an excellent way to avoid inflated rates and extra fees, plus you eliminate airport and hotel greediness.
Other travel tips
Most countries limit the amount of cash you can carry through customs so always check with your broker and stay within the limit. Make sure to carry cash in a leg pouch, money belt or hidden pocket that?s secure and out of sight. Always use hotel safes and other security measures when you arrive and remember that common sense is your best security when you use it.
We hope this article has helped you plan for a vacation budget. More information on currency trading, forex, broker reviews, fundamental and technical analysis can be found at ForexTraders.com.