How to get the best currency exchange rates
Traveling is a great way to immerse yourself in new experiences, see the world, try new foods, meet new people, and just generally unwind from your day-to-day life.
But preparing for an upcoming trip is about more than just deciding which shoes to pack.
If you’re visiting a foreign country that does not accept US dollars, you’ll want to strategize a plan of action for how you’ll be paying for everyday expenses like food, drinks, transit, and souvenirs.
Cornerstone Bank in Kansas City has helped many of our customers travel smart over the years, including educating our community on how to get the best currency exchange rates.
Let’s dive in and go over all the basics you need to know for saving money on your next international trip.
What is an exchange rate?
First of all, you should do your research on the most up-to-date exchange rate from US Dollars to the appropriate currency.
An exchange rate is the number you use to multiply, for example, 1 USD to 1 Euro, in order to understand how much money you’ll need for your trip.
There are plenty of online tools to help you find the most current exchange rates and will even let you convert unique numbers.
This will be extremely helpful in understanding how much your trip expenses are costing you in US Dollars.
How to get the best exchange rate when traveling
While many travelers opt for convenience when exchanging their money to foreign currency, it ends up costing them much more in the long run.
Not all currency exchange services are equal.
Many private institutions up-charge their visitors with added percentages to standard exchange rates and/or additional fees to their services, so much so that you may only end up with about 60% of the value of your money!
Below is Cornerstone Bank’s breakdown of the pros and cons of the different methods of exchanging your currency in a foreign country.
While exchanging your money in the US is the safest way to go, be aware that many banks do not keep foreign currency on hand.
That means your bank may need a few days of advance notice to place an order for the amount that you need.
Cornerstone Bank offers currency exchange services for $24, per exchange..
Pros: Safe, low exchange rates
Cons: Need advanced notice
The number one rule to getting the best exchange rate is to avoid airport exchange kiosks at all costs.
These kiosks will charge you much more to exchange currently for the sake of convenience, and should only be used in dire emergencies.
Pros: Convenient locations for emergencies
Cons: Extremely expensive
Word on the street is that street ATMs are not to be trusted.
However, if this ATM is managed by a reputable foreign bank, it may be advantageous to use them to pull out small amounts of cash and allow that bank to perform the exchange for you.
Be aware that street ATMs are exposed to everyday traffic, which means that these could be easily outfitted with card skimmers.
This is a common scam, which utilizes “fake” card readers placed over the top of the ATM card reader.
If used, these skimmers can extract and compromise your personal information.
If you’re unsure about whether or not an ATM is in the clear, give the card reader a tug to ensure there is not any criminal interference with your transaction.
Pros: Low exchange rates
Cons: High security risk
Direct Purchases & Conversions
When using your debit or credit card for a purchase, most foreign credit card processors will allow you to opt for the transaction to be conducted in that country’s currency.
This will signal your bank that they need to perform the conversion themselves after the transaction is complete, rather than allowing that vendor’s credit card processor the chance to up-charge you.
Pros: Low exchange rates
Cons: Foreign transaction fees possible
Why banking local will benefit you while traveling
Cornerstone Bank is local to the Kansas City area.
Just one perk of banking local is being able to reach out to the bank anytime, for any reason.
We have formed intimate relationships with our customers over the years and are able to provide more thorough service, even while they are traveling abroad.
Recently, one of our customers was visiting Scotland over the New Years holiday.
Her credit card information was compromised, and her third-party credit card vendor shut off the card to avoid incurring any unwanted purchases.
In another case, one of our customers’ sons was traveling with his hockey team in Canada over a weekend.
His debit card was not properly functioning because he had not notified the bank of his travel plans.
Most big banks utilize operators that don’t provide these services over the holidays and weekends.
However, Cornerstone Bank’s customers enjoy unlimited access to their bankers, not just operators, because we understand that life doesn’t always happen from 9 to 5.
In both scenarios, we were able to help these customers reactivate their cards. This allowed these out-of-the-country transactions to process, so they could rest assured that they would be covered during their travels.
Cornerstone Bank is here to help.
What questions do you have about currency exchange or the currency of your vacation destination? Contact Cornerstone Bank today and we’d be happy to help you strategize the best plan of action for your trip.