Whether you’re a seasoned traveler or new to jet setting, there’s one constant that everyone has to learn, and that’s how to exchange currency. At a glance, this seems pretty simple. You just find an exchange, trade your currency for, let’s say, pounds, and then that’s that. Trust us when we say if you think like this, then you’re going to spend a lot of unnecessary money on exchange fees, and you might even get scammed.
So, here are nine things that every traveler needs to know for when they exchange their currency for another.
1. Look for a reputable exchange
Let’s say, for instance, you want to buy pounds. We’d suggest first doing some research into what exchange companies will allow you to exchange your dollars for the most amount of pounds. Look for reputable exchanges that others have used and support.
You can do this by simply searching Google for “the top currency exchanges for exchanging pounds,” and several will come up with reviews and descriptions. To understand exchange rate policies better, you can also check out resources like the OECD’s guide to exchange rate policies.
2. Look for customer reviews
Going through customer reviews is the best way to look for a reputable exchange. Disgruntled customers aren’t shy about their experience and will often voice their opinions regarding the service they received. Resources like the Better Business Bureau can also help you find legitimate exchanges and avoid scams.
This kind of information is invaluable for you as you search through potential exchanges to use, as it’ll help you avoid the bad ones.
3. Check exchange rates closely
Next, check the exchange rates. Say you’re exchanging the Aussie Dollar for the pound. Generally, each exchange will have a similar rate for certain currencies, with some changing slightly.
Ideally, you want to find the best rate that’ll be in your favor. This means that you want the rate that’ll give you the most worth for your Aussie dollars when you convert them to Pounds. This figure can change depending on the dollar’s strength to the pound and vice versa.
To better understand how inflation can affect currency rates, check out this article from the World Bank on exchange rates and inflation.
4. Review their fees and commissions
This is where the significant charges can hit you if you’re not careful. When you go to an exchange, they make their money off you using their exchange services. Generally, they’d do this by adding a fee or taking a commission from your transactions.
Now, some exchanges mark up their fees to ridiculous prices, sometimes costing you 30-40% of your transaction amount.
Generally, these are smaller, independent exchanges that you’ll find at airports, hotels, or in shops around the towns. The best way to avoid this is to look at their fee policies. Be sure to check the fine print, too.
If you can’t find this on their website, then ask them. If they’re unclear or try to avoid the question, then you know something’s sketchy about that exchange, and it would be best to find another one.
5. Consider how accessible the currency is
Look for platforms that are easy to access whenever you need to. Ideally, you should use an exchange platform that’s user-friendly and easy to exchange money on. Having transparency in every part of your transaction is also beneficial.
A bonus would be if the exchange you’re using has an app that allows you to process your transactions from your phone.
6. What conversion options do they offer?
Often, reliable exchanges will offer you some different conversion options to cater to your needs. This might include allowing you to exchange multiple currencies at a time, or even some cost-saving solutions to avoid heavy transaction fees. Either way, it would be helpful for you to look into this.
You can explore official resources on how exchange services work, such as those provided by the U.S. Department of the Treasury.
7. How long do transactions take
Transaction time is an important one to consider. Let’s say you’re traveling to England in two days. Ideally, you’d want your pounds to be available to you when you get there. So, you wouldn’t want to exchange your money with an exchange that’ll take a week to process when you have two days to go.
Some exchanges might offer faster transaction times for an additional fee, but if you can, try to find an exchange that has relatively consistent transaction times within the 1-3 day turnaround option.
8. What are their security measures?
When dealing with money, security is always important. Make sure the currency exchange you use has robust security measures in place. That includes features like two-factor authentication for log-ins to their platforms and encryptions that safeguard your transactions while they’re in progress.
You might also want to inspect how they keep your credentials. For instance, do they save your logs, and if so, how do they protect them?
9. Do they offer customer support?
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What do you do if something goes wrong with your transaction? You contact customer support, right? There’s nothing worse than being stuck in another country and having your finances tied up due to a transaction issue.
That’s why it’s essential to find an exchange that has a reputation for offering good customer service. Their service should be friendly, transparent, and prompt when dealing with your issues.
Final Thoughts
Having the opportunity to travel is a wonderful privilege, but, like most privileges, it comes with some terms and conditions. In this case, you need to learn the ins and outs of exchanging money so you don’t get caught out by scams or higher exchange fees.
With a little bit of time and research, you’ll find the right exchange rate and learn how the pros manage their currency exchanges.
