Effective Planning To Get The Best Travel Money Exchange Rate.
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Planning a holiday is always great fun. Investigating the best airfare and accommodation bargains can really make your holiday much more enjoyable. Money saved in upfront expenses allows one to allocate more to the shopping budget. One aspect of travel that is often overlooked is the role of the travel money exchange rate. This is where you can also save money by doing a little investigation and upfront planning.
It comes down to knowing where to get the best travel money exchange rate and making best use of the available choices. Many people rely on the hotel desk or the airport money exchanger as a source of local currency. Unfortunately, these options do not always offer the best rates. To make your money stretch further you should make plans to have some initial currency on hand to pay for immediate expenses on arrival to your holiday destination. Your local bank or travel agent will often be able to help you out with tourist exchange rates. You will need initial funds to pay for transportation, food and to tip hotel staff for their services. Sourcing some funds prior to departure will ensure you are well prepared.
When you need to exchange money there are some useful things to consider. It boils down to two main factors: the tourist money exchange rate and the fees charged by either the money brokers or the banks. In general, you will always get a better holiday money exchange rate by doing the exchange in a capital city. Remote money exchangers tend to give poorer exchange rates. Often there is little competition so they can get away with charging what they like. Usually you can get a better rate from a bank. However, depending on the amount you exchange, you might be better off accepting a lower rate from a money exchange vendor. This is because a bank will often charge a service fee which detracts from the amount you end up with in your hand. An example follows:
A US citizen comes to Australia and decides he wants to exchange $1000 in cash for local Australian dollars. Here are some interesting scenarios to consider to point out the effect of tourist money exchange rates and fees on the actual balance you end up with in your hand.
Major Bank
1000 US dollars / $0.925 (Australia dollar rate) = $1081.081
Bank Service Fee = $10
Funds In Hand = $1071.081
Tourist Money Exchange Rate Broker
1000 US dollars/$0.040 (Australian dollar rate) = $1063. 829
= $1063.82
In the above example, despite paying the $10 service fee, using the bank to capture the superior exchange rate results in a better overall deal. Consider, however, the following scenario:
Major Bank
300 US dollars / ($0.925 Australian dollar rate) = $324.324
Bank Service Fee = $10
Funds in Hand = $314.324
Tourist Money Exchange Rate Broker
300 US dollars / ($0.940 Australian dollar rate) = $319.1489
Funds in Hand = $319.1489
You can see from the following examples that the amount of money you exchange, and not just the rate itself has an important effect on the outcome. Exchanging $1000 will produce a superior result using the bank. If the traveler only exchanges $300, he gets a better deal from the money broker.
You should also consider that using a credit card or withdrawing cash from an ATM may be an option. Whether or not it results in a favorable tourist exchange rate will require you to do some research beforehand. You can find out about this prior to departure from your local bank. The availability of the internet also makes it possible to check the exchange rate prior to doing the transaction.
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