Getting an Accurate Currency Rate for an International Trip

How do I know if I’m getting an accurate exchange rate?
Almost everyone agrees that saving money is essential whether it is business related or personal. Everybody wants a deal, especially when traveling, because we all know they exist, it’s just a matter of finding them. Finding them takes research as well as patience, so a great deal of planning is necessary to get airline, hotel and restaurant deals long before your arrive at your destination. Most travelers forget that the currency exchange market is a for-profit business. Some travelers think it’s a free service with a little extra for the exchange merchant, but a little research will correct those thoughts quickly. Most exchange merchants make a very nice profit without drawing any attention to the methods they use to achieve those profits.

The currency trading market is constantly changing, so it’s hard to know what a real time exchange rate looks like. In fact, real time rates are virtually non-existent if you’re exchanging money with a bank, credit card company, airport merchant or a hotel. Exchange rates can change hourly, so a rate posted in a newspaper or other publication is usually obsolete when the publication is printed. Printed posted rates are only estimates. The only way you can get a real time rate is by using a professional currency broker, who watches the market every hour and will inform you when your currency pair’s value is in your favor.

Currency brokers do make a profit, but there are no hidden fees or surcharges. Banks, credit card companies, airport merchants, websites and hotels love extra fees and surcharges. A professional will also give you tips and strategies that will help you save money before you ever leave home. A broker will help you exchange money using an averaging strategy while you’re planning the trip, which will help offset any sudden value surges in your currency pair. Averaging is done by exchanging small amounts of money at different times, so you can take advantage of fluctuations in the currency market. Once a transaction is made, the broker will send the currency and a receipt to you using a secure overnight service.

How does a currency exchange work?
Let’s say you’re traveling to Peru and want to exchange U.S. Dollars for Nuevo Sol. If you go to a bank, the posted rate may be 1.00 USD equals 2.8719 PEN, but when the bank actually exchanges the money it receives 3.4183 for every Dollar it exchanges, plus the bank will add a transaction fee, which means the bank makes over 10% profit on your money. Credit card companies do the same thing, but add additional fees and surcharges, so you’re paying them over 15% profit. Airport merchants pay high rents and know they have a captive audience, so they may only post a rate of 2.3692, which means you are paying them over 20% in profits. Hotels may even lower the rate, so they can make more money on your money. Exchanging currency with a broker eliminates all those extra fees and inflated rates.

 Other travel tips
Most countries have a limit on the amount of cash you can carry through customs. Check with your broker and stay within the limit. Carry 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 reach your destination. Common sense is your best security when you remember to use it.