Traveling to Europe is an exciting experience that can offer a wealth of new experiences and opportunities. Understanding the currency exchange process is essential whether you travel for work, relocate, vacation, or do evangelical missions. Unfortunately, it is impossible to use local currencies in Europe; instead, travelers must rely on foreign exchange (Forex) services for converting their money into Euros or other acceptable forms of payment, highlighting the importance of foreign exchange risk hedging to mitigate potential financial uncertainties.
Currency conversion is an essential part of traveling to Europe, as it provides travelers with the means to pay for goods and services in a foreign country. However, currency conversion can be confusing if you are unfamiliar with the different exchange rates, fees, and other factors that affect the value of your money when exchanging currencies.
These five tips will help you get the best rate when converting your currency. They will ensure you get the most out of your travels in Europe. Also, it will simplify your experience while in a foreign country.
1. Stay Informed
The mid-market exchange rate of various currencies keeps changing all the time. You may get a different rate from what you saw earlier in the day. Your expectations should not lie on one fixed rate. Keeping yourself informed about the up-to-date exchange rates will help you decide wisely when to convert your money and which currency exchange service to use.
For instance, a Euro Canadian dollar chart is essential when traveling from Canada to any European country using the euro. Consider how the service handles exchanges. Banks, credit cards, and online money transfer services are the most common exchange platforms. Their services vary according to the governing terms. For reference, the exchange rates used with banks are below the market rate to make a profit margin.
2. Check the Service Charge
The charges you incur when converting currencies determine the exchange rate you receive from your forex broker. The preferred exchange platform should offer competitive service charges and reasonable exchange rates. Also, consider the other costs imposed by the forex broker, such as delivery fees, customer service fees, and transaction fees.
Most banks do not charge currency conversion fees because they get a cut on the exchange rate. But that is the worst way to go. Only use it if you have no other option. Assuming your bank deducts USD 0.1 for every dollar exchanged, and you want to convert USD 10,000, you will end up paying an additional $1000 for this transaction.
On the other hand, services offering a competitive exchange cost will deliver the current mid-market rate. For instance, online forex platforms will charge you around 0.25% of the amount you are exchanging as a transaction fee. In that case, you would pay $25 for converting $10,000.
3. Convert Some Cash Before Leaving
The trickiest part is arriving in Amsterdam with the Nigerian Naira, a currency not accepted even in Cotonou. You cannot buy anything or even pay for the cab to your hotel. The airport terminals have exchange services, but the exchange rates are outrageous. You can only use it during an emergency and convert only the money you need to avoid wasting your hard-earned money.
The best way to avoid such a situation is to convert some money beforehand. Estimate how many euros you will need after you enter the European city. Exchange your money at the bank or online before you leave home. That way, you already have some cash in hand upon arrival and do not need emergency transactions. You can convert the rest once you settle in Europe. That gives you time and the peace to look for the best broker.
4. Pay with International Debit or Credit Cards
Credit card providers charge according to the terms you signed. Some will not charge extra fees for drawing money from an ATM abroad. And they will give you the current market rates for your currency. However, these debit or credit cards may charge you a monthly or annual card maintenance fee. If you already have the card, you will not experience any changes.
The best thing about using a credit card is that you do not need to carry cash around. That helps you avoid dealing with money theft and other security issues. Also, if your card gets stolen, you can block it by calling your provider’s emergency number. Internet banking and spare cash at your hotel will rescue you in such times.
5. Pay with Local Currency
After arriving in Trondheim, Norway, you can use the euro to buy goods and services. That is the best way to get the perfect exchange rate from using credit cards. Some tourist centers, restaurants, and local shops may offer you to pay in your home currency. That way, they debit you in KES if you come from Kenya instead of EUR.
This trick will charge you extra because they offer a poor exchange rate. Ask them to bill you in euros, and your card provider will do the conversion at a better rate. That eliminates the extra fees you would have paid the merchant.
Conclusion
Currency conversion is mandatory for every traveler. Regardless of your intentions, the bottom line is getting your money converted to the currency of the place you visit. Learning about exchange rates, markets, brokers, and tips can help you save money. Use the five pointers above to make your currency conversion more economical.