Or what You need to Know about currency conversion (and your bank might not tell you)
Your clothes are almost packed into your new suitcase, you’ve read the travel books, paid for the holiday but have you forgotten something? Have you really given thought to how to access your money when on holiday? This could make or break your well earned travel plans.
Traveller’s cheques were the way to go in the past, but waiting in line at the bank is not fun at home and definitely not fun in a foreign country. There are much better ways.
I really dislike paying exorbitant fees to banks for the privilege of using my own money overseas, and that is why I think I might have come up with a couple of options that could cut down these charges, but first:
The Starting Point – Dreaded Foreign Exchange Rate
The first thing you need to know is that the bank or organisation you decide to deal with to exchange your money for foreign currency will build a margin into the exchange rate they offer you relative to the official exchange rate.
The official exchange rate: As of today, using the official exchange rate, you will receive is 0 .72 euro cents for every $1.00. But the organisation you deal with will definitely not give you the official exchange rate. For example the ANZ will give you .69 euro cents for $1.00 and other banks will vary around this figure – the bank then keeps the 3 cent margin. This is an unavoidable cost for all foreign exchange transactions but we are mentioning it here so that you are aware. The real point of difference between the banks are the other charges in addition to the currency conversion.