Great unbelievable tips for currency exchange for a great trip

Biz Travel Hacks Currency Exchange Money Exchange Business Travel
Biz Travel Hacks, Currency Exchange, Money Exchange, Business Travel

Raise your hand if you ever felt a bit anxious when you had to exchange currency for a trip. You plan your itinerary, book your hotel and flights, arrange your transfer, get your visa in order, but currency exchange…. Well, currency exchange is a beast hard to tame.

In this article, I am going to give you tips about the best tactics to exchange money successfully and understand the mechanisms of how currency exchange works. You will understand how currency exchange rates are determined. Additionally, you will also learn how and where to for currency conversion if you are traveling to a foreign country.

What are currency exchange rates?

International currency exchange rates are simply the cost of how one unit of foreign currency compares to another currency. Many different factors act to determine their value and currency exchange rates are either fixed (or pegged) or floating.

A fixed exchange currency rate is when one currency moves in tandem with another it is pegged to. For instance, for years the Argentine Peso had a direct link to the US Dollar. Of course, that impacts the country’s economy and each nation has to understand the best strategies economically for international trade.

On the other hand, a policy of floating exchange rates allows the country to influence its own economic and global policies. Supply and demand determine the value of money in the global currency markets. Hence, if the demand is high, the currency value does up. Contrarily, if it’s low, prices collapse. Most countries operate on a floating currency exchange scheme after the collapse of Bretton Woods between 1968 and 1973.

Foreign Exchange (or Forex trading) is a good way to determine countries financial health. Of course, being a specific currency very cheap compared to another can actually influence travel positively. That’s because the amount of money spent values more compared to another country.

For instance, you can get more value from a $100 hotel room in Bangkok compared to Zurich. That’s because you can get more Thai Bahts from $100 compared to Swiss Francs.

As a matter of fact, you cannot really predict if your money worths more or less in the day you convert it. However, there are strategies that help you minimize the impact of currency exchange.

Consequently, you will make better use of your money, feel safer and make sure you cover all corners to enjoy the most of your travel budget. In that case, you can picture an extra bag of souvenirs to bring home with the change you will have left.

How are currency exchange rates are determined?

As I mentioned above, there are several ways a currency value is established in the foreign exchange market.

1) Inflation Rates – Changes in market inflation impact costs of goods and services and the value of a currency. A country with constant low inflation rates maintains the intrinsic value of things internally. Consequently, it promotes a rising in currency value. On the other hand, a country with higher inflation rates generally sees a reduction in its currency purchase power. Then, hikes in interest rates usually accompany depreciation.

2) Interest Rates – Interest rates pushes the own currency’s valuation up as it attracts foreign capital looking for great lending deals. As a result, the local currency has an increase in value.

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3) Current Account and Balance of Payments – They reflect the country’s trade balance with its international market. If a nation is buying more than it can export, incurring in massive import of products, for example, it causes currency depreciation. As a result, it impacts exchange rates.

4) Government Debt – It is the measure of how much a government owes to its creditors. Should it owe a lot of money, it is more likely to borrow international currency to pay its debt. More foreign money coming in, more likely the impact to local currency.

5) Political stability – An unstable country may repel international investments, and foreign currency withdrawn, impacting local currency value.

6) Recession – Economic recession impacts the country’s ability to attract foreign currency.

7) Speculation – If a country’s currency value is expected to rise, investors will demand more of that currency to make a profit shortly. As a result, the value of the currency will rise due to the increase in demand.

How do you estimate your currency exchange budget?

First of all, let’s assume the main expenses of your journey, like air/train tickets and hotels, are already paid. Or that you will for it with card. With that in mind, we can focus on your meals, local transportation, and the amenities expenses you will incur in.

As your main expenses are taken care of, you can now calculate a daily budget to estimate how much cash you will need. If you are traveling for business, your company is giving you those guidelines.

So, the amount of money you need will determine where to get it from. If you do not need much, maybe you should not bother too much with where to exchange. However, if you are going far or for a long time, you need to do some research about it. 

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The first place you look at is your bank. Depending on your status, you can have better conditions to exchange money and even use your card abroad. Then, look for institutions specialized in money exchange like Western Union, MoneyGram, Wise, etc.

Moreover, you can explore home delivery services that will send international currency to your house via courier. Keep it in mind these organizations may need some time to get the amount of cash you need on certain occasions. For some destinations, you will have no choice but to change money upon your arrival. Brace!

I personally like to have a ratio of 50/50 between cash and card. Because for small transactions like a souvenir or cup of coffee along the way, you may want to use local currency. Some card providers do charge fees for each transaction, plus the regular exchange rate.

Nonetheless, put aside some money for emergencies. We never know.

What to look out for when you exchange money

You probably know that currency exchanges are never fixed. They fluctuate because factors like inflation, supply and demand, and unemployment rates directly impact them. Check this video for more details.

Provided that, compare the rates in various institution and look for the best deals. A few cents or pence here and there can make the difference, especially if you are converting large amounts of money. For times of economic uncertainties, be ready to expect rate changes on the same day. Henceforth, banks will not miss out on the opportunity to cash out during turmoil.

Commissions are the big thing to look at too. Rates may look really appealing at some shops, but they may also charge a commission on top of the exchange rate. These commissions are either fixed or a percentage of the total value of your transaction.

As a result, it is unlikely that you will get a better deal by utilizing a service that charges a commission on top of your transaction. It is like going to a shoe shop to get your new NIKE AIR MAX, and the salesperson charges a fee to collect it from the storage in the back of the store.

However, you also need to be mindful of these “outlets” offering a bargain of 0% commission. They may not be the best option for you, you know? As they set up their own exchange rate, the overall costs may be much higher than you anticipated.

Indeed, it is a balance, and as I said, you need to do your research. You need to look at the overall costs vs. the convenience of getting that physical cash in your hands.

Some outlets and institutions are using BITCOIN for currency exchange. Maybe it is one way to utilize your investments to support your travel costs.

What to avoid doing when you exchange currency!

Buy travelers’ checks

Really?!?!!? Traveler’s checks… It can be very limiting to buy them and exchange them. They are becoming a rare option. There might be some countries that operate like that, but I assure you the chances are limited.

 Exchange money at airports

Now, this is common sense, no? The exchange rates at the airport are rarely competitive. This is because of limited competition, and people want to cash in and out at the very last minute. If it is your only option, you may pre-order the cash online to avoid exorbitant rates.

Buy cash at high street shops

 I know that you just want to get this over with but avoid the temptation of using these shops for currency exchange. Within a couple of minutes’ walk and a bit of research, you can get better rates at banks and even online. After all, you can ask for couriers to deliver the money to you to your hotel late in the day.

Use your credit card to cash out

This is probably your last resort as I mentioned above. This is because of the usual fee applied to your withdrawal. Moreover, it can impact your credit score. Notably, you will still be charged that uncompetitive exchange rate. In summary, it is not a good deal. to avoid


How to exchange money in a foreign country?

Use pre-paid travel cards

Those can be a very good option to control your budget. Moreover, if you are an avid traveler, you can keep reloading the card for future trips. Credit card providers like Visa, Mastercard, and Amex usually back them up, and they are available in many countries and different currencies as possible.

It is comparatively as easy as having your regular bank cards, but you just need to pre-order them in advance.

I have been using Wise every month, and their rates are impressively competitive. When you get a quote from them, they compare it to other banks, and 99% of the time, they have the best price. When on their website, look for the MULTI-CURRENCY account to ask for your card.

 Pay for things in the local currency

Do not be tempted to pay for products and services abroad in your own countries currency. No, no, no! Although it looks easy and tempting, their rates will not be as competitive as the bank located three doors down the road. Come on! Just walk a couple of minutes, and you will save money and maybe discover something that was not in your plans.

Settle the bills only in the local currency

When in a restaurant or shop and settling up a bill with your card, you will ask to pay either in the local currency or in your own country’s currency. If you pick your country’s currency, you are in danger. And it is because the retailer will do the currency conversion rather than your card provider. In other words, something that is known as dynamic currency conversion. With that in mind, your bill will become more expensive.

Have a few dollars for an emergency

Have a few dollars for an emergency – The US Dollar is the most accepted currency globally, and in case you do not have any money, you can still resort to that for some transactions to get you to a safe place. 

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What documents do I need to exchange money? 

It really depends where you are, who you are, and where you are going.

If you traveling to neighboring countries that may be part of a bloc or community of nations like the European Union, very likely your bank card will be enough. As you can pay for your transactions online, retailers can trace your details so not much is required.

In some situations, you may be required an id, like your driver’s license or passport. This allows the exchange bureau to record who is buying the money and where the person is going. If you are going to a country whose currency is not widely available, you may be required to prepay the amount of money you want to buy. This is because the shops may need to reach out to Central Banks or other exchange bureaus to get what you need.

In countries like Brazil, for example, you may need to present your social security number or equivalent along with your Id. This is because you need to pay a local percentage tax on top of each transaction. In essence, as you make the exchange transaction, computers will send the information immediately to the central government. One extra step as you exchange money prior to your trip.

If you are traveling, most likely you will need your passport or any other accepted form of identification. mone


In my opinion, I think it is prudent to have a bit of cash upon your arrival on a distant land. In fact, you can cover your bases by setting up a daily budget, buying some physical cash, understanding the exchange rates of your bank versus other specialized institutions, and buying a travel card to control your expenses.

With that, you can enjoy your trip safely with enough money to buy souvenirs and those most famous local gelatos.

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