If you are planning to travel abroad, one of the most important things you need to consider is how to get the best forex rate for your foreign currency. Forex rate, or foreign exchange rate, is the rate at which one currency is exchanged for another. It determines how much money you will get in the local currency of your destination country.
However, getting the best forex rate is not as simple as it sounds. There are various factors that affect the forex rate, such as demand and supply, market fluctuations, geopolitical events, and transaction costs. Moreover, there are different sources from which you can buy or sell foreign currency, such as banks, travel aggregators, online platforms, and money changers. Each of these sources may offer different forex rates and charges, depending on their business model and profit margin.
So, how can you save money on forex rates and avoid paying unnecessary fees and commissions? Here are some tips and tricks that can help you get the best deal for your foreign currency exchange.
Compare the Forex Rates Offered by Different Sources
The first step to saving money on forex rates is to compare the forex rates offered by different sources. You can use online tools such as Wise, Xe, Thomas Cook India, BookMyForex, or Bing to check the live forex rates of various currencies and compare them with the rates offered by banks, travel aggregators, online platforms, and money changers.
You should also check the hidden charges and fees that may be levied by different sources, such as service tax, GST, convenience fee, delivery fee, card fee, etc. These charges can vary from 0.5% to 5% of the transaction value. You should also check the minimum and maximum amount that you can buy or sell from each source, as some sources may have limits on the transaction size.
By comparing the forex rates and charges of different sources, you can find out which source offers the best value for your money. You can also negotiate with some sources to get a better rate or waive some charges.
Plan Ahead and Book Your Forex in Advance
Another way to save money on forex rates is to plan ahead and book your forex in advance. This can help you avoid the volatility and uncertainty of the forex market, which can cause sudden fluctuations in the forex rates. By booking your forex in advance, you can lock in a favourable rate and protect yourself from any adverse movements in the market.
You can book your forex in advance from online platforms such as Wise, Thomas Cook India, or BookMyForex, which allows you to book your forex up to 60 days in advance. You can also choose the delivery mode of your forex, such as cash, traveller’s cheque, prepaid card, or wire transfer. Some online platforms also offer features such as rate alerts, freeze rates, and refund guarantees.
By booking your forex in advance, you can also save the time and hassle of buying or selling foreign currency at the last minute. You can also avoid the risk of carrying large amounts of cash or facing a shortage of foreign currency during your trip.
Use a Multi-Currency Card or a Debit/Credit Card with Low Foreign Transaction Fees
A third way to save money on forex rates is to use a multi-currency card or a debit/credit card with low foreign transaction fees. A multi-currency card is a prepaid card that allows you to load multiple currencies on a single card and use it for making payments or withdrawing cash in different countries. A debit/credit card with low foreign transaction fees is a card that charges a low or zero fee for making payments or withdrawing cash in foreign currency.
Using a multi-currency card or a debit/credit card with low foreign transaction fees can help you save money on forex rates because they offer competitive exchange rates and low or zero charges. They also offer the convenience and security of carrying a card instead of cash. They also offer features such as online access, SMS alerts, fraud protection, etc.
However, you should be careful about some pitfalls of using a multi-currency card or a debit/credit card with low foreign transaction fees. For example, you should avoid using them for dynamic currency conversion (DCC), which is when a merchant offers to charge you in your home currency instead of the local currency. This can result in a higher exchange rate and additional charges. You should also avoid using them for ATM withdrawals that charge a high fee or have a low withdrawal limit.
By following these tips and tricks, you can save money on forex rates and enjoy your trip abroad without worrying about the currency exchange. Happy travelling!
This post How to Save Money on Forex Rates: A Guide for Smart Travellers was originally published at Finance Crave
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