Simple Currency Tips that save you money on your international trip

What can I do to save money when I exchange currencies?

The currency exchange market can be confusing and its movement is hard to understand at times, so it’s important to do some planning before you actually exchange money for an international trip. With some help you can develop a strategy that ensures you receive a real time rate without extra fees and surcharges. Companies that exchange currencies are in business to make a profit and they have engineered a system where they can maximize profits quietly. If you understand how companies make money from exchanging currencies, you can reduce your exchange costs and increase the amount of money you can utilize on your trip. There are few useful tips that will help you exchange money like a professional.

The first tip is to contact a professional currency broker. A professional broker will offer you a real time rate that includes a small profit and will supply you with useful information about the currency pair you’re exchanging. A broker will help you average your exchanges while you’re planning the trip, which can offset any sudden value surges in your currency pair. Averaging is done by exchanging small amounts of money at different times. Once you complete a transaction, a broker will send your currency overnight using a secure service. Make sure you get a receipt, so you can compare rates in the future and exchange any remaining money back to your currency when the trip has ended.

The second tip is to avoid airport exchange merchants. Airport merchants will post an inflated daily rate, because the merchant knows he has a captive audience that needs currency for transportation costs and other minor purchases. An airport merchant may add an additional 25% to the rate to cover his expensive rent and to make a profit. Exchanging money in hotels is also expensive. The hotel knows you like the convenience of exchanging money with them and add a hefty profit for their services.

The third tip is use banks to exchange currency only when you’re forced to use them while traveling. Commercial banks that have an international presence usually offer a better rate than smaller banks, because they can get a better real time rate. Banks also add a fee to every transaction, so you could end up paying a bank 10% profit for doing almost nothing. Credit card companies add extra fees to exchange transactions and they add a surcharge to trip purchases, which means they can make over 25% on your money.

One example of how banks and credit cards can make a quiet profit is when you’re planning to travel to exciting Egypt and you want to exchange U.S. Dollars for Egyptian Pounds. The bank may post a daily rate of 1.00 USD equals 5.4956 EGP, but when the bank actually exchanges the currency they get 6.8793 EGP for every Dollar they exchange, plus they add a transaction fee on every exchange.

Other travel tips
Most countries limit the amount of cash you can carry through customs, so check with your broker and stay within the limit. Carry your cash in a money belt, leg pouch or hidden pocket that’s secure and out of sight and use hotel safes and other security measures when you arrive at your destination.

ForexTraders.com provided this article to help you save money for a trip abroad. For more information on currency trading, strategies, analysis and forex broker reviews, make sure to visit the site.