When you are visiting another country for business or for pleasure, you will likely need to obtain some of the local currency.
There are a huge range of places from which you can exchange foreign currency. These include banks, travel agents, foreign exchange businesses and airport kiosks. All of these providers offer similar services and so the deciding factors for which to use will depend on convenience, risk and the charges they make.
Currency fluctuation is not likely to be a major consideration for most short stay visits. It is unlikely that currency fluctuations will be large over a relatively short period of time. Nevertheless, when this does occur, its affects can be quite considerable. There are three main ways in which currency conversion rates might fluctuate:
1. There may be a steady and gradual decrease in the value of the foreign currency against that of the US dollar. This might be because the US is doing well and its currency is appreciating. It could also be that the currency of the country you are visiting is decreasing because of economic difficulties. Maybe a combination of both.
Whatever the reason, if the currency is effectively becoming cheaper to buy on a day by day basis, then you are likely to benefit from buying your currency as late as possible. This would mean buying the currency in the country you are visiting, unless charges negate any currency fluctuation gains.
2. There may be a steady and gradual increase in the value of the foreign currency against that of the US dollar. This might be because the US is economically challenged and its currency is depreciating. It could also be that the currency of the country you are visiting is increasing because of good economic performance. Maybe a combination of both.
Whatever the reason, if the currency is effectively becoming more expensive to buy on a day by day basis, then you are likely to benefit from buying your currency as early as possible. This would mean buying the currency in America before you travel.
3. It is possible that, if you are visiting a country that is economically unstable, such as Zimbabwe in recent times, there could be a sharp devaluation of that country's currency. In this case, it would be much better to leave buying your currency to as late as possible.
Having decided whether to buy in the States or the country you are visiting, you then need to decide from whom to purchase the currency. Where to exchange will depend on the evaluation of a number of factors including:
1. The best deal, taking account of exchange rates offered by the provider and any other charges that they levy. It is usual for there to be a slight difference between providers in the rate at which they sell the currency. This helps to cover their administrative charges. Some will levy a minimum fee, particularly if you are exchanging only a little amount of currency.
2. Whether or not there is free exchange of monies back into US currency. If you wish to buy currency before you leave America, there is the possibility that you buy more currency than you will need. In that case you will want to change the money back on your return. Look for a provider who will offer to exchange left over foreign currency to dollars at no charge. There are some about.
3. availability of other services with a discount if currency purchased at the same time (or better exchange rates if buying travel insurance for example). There are a range of offers that might be made, and it is worth considering these packages as some significant savings can be made.
For sheer convenience and the ability to take just the amount of money you need, it is often useful to simply draw funds direct from your bank account from local ATM machines. This will provide you with the amount of foreign currency you need, as you need it.
It is unlikely that you will be left with any significant amount of foreign currency to change back if you use this method. However, remember that this is not often the best rate that you could get.
