When you travel abroad, there are certain aspects you can’t control such as whether your flight takes off on time or how good the road directions are to help you get out of the airport, but one thing you can take control of is how you exchange your currency. Thinking ahead means you can avoid having to make lots of exchanges while you are abroad, helping you avoid expensive currency exchange fees.
How to Get Local Currency While Traveling
In an emergency, should you need to change your cash into local currency, of course, you can use exchange bureaus at the airport or in major towns and cities, but often these providers don’t offer the best exchange rates and you will have significant exchange fees on top. Banks are another source of local currency if you run out, but this blog offers some alternatives to reduce the cost of currency exchange while traveling.
What is an exchange rate?
When you convert one currency into another, this is known as currency conversion. It is done using the exchange rate which can vary. The exchange rate is expressed as a ratio of one currency to another, for example $1: MXN 19.03 which means that every US dollar is worth 19.03 Mexican pesos. Many factors can affect the exchange rates such as interest rates, inflation and other global, economic and political events. You can check out exchange rates online using our currency converter.
Using ATMs abroad
Many debit and credit cards will allow you to access local currency direct from ATM machines abroad. However, exchange rates can vary a lot and there may be significant fees both from your bank and the provider of the cash machine. This can be a good option if you need a small amount of cash in a hurry, but it’s best not to rely on it for all your exchange needs because international fees can be very high.
Minimizing Exchange Fees When You Travel
Traveling can be costly but there are ways you can reduce the amount of money you spend on currency exchange fees. Here are three alternatives to consider:
1. Send money before you travel
One advantage of sending money in advance to the country you are traveling to is that you know what the exchange rate will be and you may be able to more easily shop around for the best rate. When you are traveling, keeping within your budget is important. You can send money before you travel by setting up a money transfer account with a specialist provider such as Western Union.
Using our money transfer app, you can track the exchange rate to see how it is moving so you can make your purchase of currency at the most advantageous time.
2. Use exchange fee-free credit cards
An alternative to sending money ahead of traveling, is to apply for a credit card that offers fee-free exchange of currency. These cards enable you to purchase abroad without incurring a transaction fee for exchange. However, be aware that the exchange rates applied may not be as good, as this is how the credit card companies will make their money. Check the small print when applying for such cards and ask about the exchange rates used on transactions so you can calculate whether you are getting a good deal.
3. Use multi-currency digital wallets
Multi-currency digital wallets are different from regular digital wallets because they allow you to hold many different currencies in the same app and to switch between them easily. Each currency exchange will incur a fee though, so make sure you only exchange the amount you need for your trip, or you could end up incurring additional fees.
Opening Your Western Union Money Transfer Account
Whether you are planning to make a one off or regular money transfers, consider setting up an account with Western Union. To open an account, you will need to complete an online form and upload your card payment details. The website and app are reliable straightforward ways to make your first international money transfer. Once you’ve sent one transfer, you can simply use the same details to make recurring payments.
If you are new to making money transfers, we have a wealth of frequently asked questions in our Help Center.
