How to get the Best Exchange Rate?

Between commissions, credit card surcharges, ATM fees and other expenses, we almost always have to pay a little extra for the privilege of exchanging one currency for another. How can we minimize these expenses and get the best exchange rate when we are traveling in a foreign country? Lets discuss about it briefly.


We must know what is the current rate? Before we leave for our trip, check out the XE currency converter for an idea of what should be our exchange rate? If we are taking an extended trip, we must check the rate periodically to stay abreast of any major changes in market.


We almost always get the best interbank exchange rate when buying foreign currency with either ATM cards or credit cards, which will usually be 2 to 7 percent better than the rates we'll get when exchanging cash or traveler's checks. We must try to use credit cards whenever possible for large purchases such as hotel bills, tickets , car rentals and other such expeses. We must keep in mind that most credit card companies add fees for transactions made in foreign currencies. Local vendors such as restaurants and shops may also charge a fee for credit card transactions. We musr read more about using credit cards wisely in Money Matters on the Road.

If ATM's are easily accessible in the country we're visiting, we must use ATM card for day-to-day cash needs. But again, remember that our bank (and the local bank) may charge us an additional fee for each transaction -- making it generally a good idea to take out as much money at a time as you feel comfortable carrying, rather than making multiple stops at the ATM.


When exchanging traveler's checks, most of the time it is better to exchange our money in the country we're going to, not in the U.S. An exception to this might be if we are convinced the dollar is going to head sharply lower while we are gone and want to exchange at the current rate by purchasing traveler's checks in a foreign currency.

We usually get the best exchange rates at banks, post offices and American Express offices. Hotels are also worth a try. Avoid the change bureaus we see everywhere in airports, train stations and touristy areas. They usually have the worst rates, though occasionally we get lucky.


We must read the posted exchange rates carefully, and ask for the net rate after commissions. Some commissions are charged on a per-item basis on each transaction, others on a percentage basis. To lure customers, some money changers will post the sell rate for U.S. dollars rather than the buy rate.