Tips for Changing Money
As a traveler, your main concern will be getting the most favorable rate possible. A commonly asked question is: should I convert now, or will my money be worth more when I go abroad? Unless your trip is months away, the answer is that it probably will not make much of a difference. The major currencies tend to move +/- 1% in a given day, which is a relatively minor move unless you are changing thousands at a time. Experts agree that travelers will be best off looking for a place that will change money inexpensively.
Exchanging Currencies for Travel Abroad
When traveling to foreign countries, travelers need to think about how and when they will convert their currency. Luckily, there are many options for travelers to choose from when it comes time to make the exchange. There are two major factors to look at when exchanging currency: the exchange rate and the amount of commission charged. Travelers are often fooled into exchanging for the lowest rate, while being charged a high rate of commission on their transaction. The strength of the US dollar is an important concern when planning to pay for a trip. When the dollar is losing strength, it is best not carry the dollar. Also, if the dollar is losing strength, try to pay for expenses such as airfare and hotels in advance. This way, the large expenses are paid for when the dollar is at its potentially highest point, therefore benefiting you the most in terms of expense.
Exchanging Currencies While Still in the States
While still in the states, travelers can exchange their currency at the local bank. Although this may seem to be a convenient way to prepare for your vacation, the costs associated with exchanging in this way can be large. Also, there are several online venues which allow you to pay American funds, and the currency you desire is then sent to your home. These sites generally offer decent exchange rates but charge fees and delivery charges. With these services, there is also the risk that the company is fraudulent or that the currency could be stolen while in transit. Exchanging a currency through this online medium may seem convenient, but be sure to weigh the risks involved.
Exchange Money at Banks
Another logical place to look to exchange currency is at banks. The exchange rate at banks is usually pretty good, although a bank has two alternatives as to what rate to provide. In some banks, the exchange rate depends on the supply and demand of the currency, and with this system, you end up with an exchange rate fairly close to the ones being offered in major exchanges. The second option is that the government of the country you are traveling sets the exchange rate, and all exchanges must stick to that rate. In either case, banks do offer a convenient way to exchange currency without incurring a large amount of costs.
Click here to read about "The dollar alternatives" by CNN Money. Central bankers diversify to other currency alternatives in their reserves. Here are some of the options -- both practical and absurd -- to replace the greenback.