Here are 11 tips and tricks for money exchange for trips abroad.
- Author :
- TATA AIG Team
- Published on :
After the onset of COVID-19, international travel came to a standstill. But many countries have opened their doors to India again for international travel - thanks to the increased number of tourists and travellers taking the vaccine. If you are planning to travel abroad this year, you must have three things in check - your visa and passport, a comprehensive travel insurance policy, and some local currency of the destination you are travelling to.
That said, there are several things you must remember and be vigilant about while carrying out money exchange for trips outside India.
10 Tips to Keep In Mind while Exchanging Money Abroad
1. Get foreign cash from your bank beforehand.
To avoid any hefty currency conversion fees and get a legitimate currency exchange rate, consider getting the currency of the country you are visiting from your bank. You will not need to predict exactly how much you need for the entire stay of travel and carry the entire amount. You can get a quarter or half the amount you need. Your bank will give you a favourable exchange rate and give you the required amount promptly. You can even get perks like discounts, same-day delivery, and more, depending on your bank.
2. Notify your bank of your trip beforehand.
While you are getting the exchange currency from your bank, it is a good idea to inform them about your trip and its duration. Even if you are not getting local currency from your bank, you can inform them via phone or email. This will prevent your card or account from getting frozen when you are transacting in a foreign country and being detected as suspicious or fraudulent. Ensure you inform your bank about whatever countries you plan to visit so that when your transaction patterns change no problem arises.
3. Keep up with currency exchange rates.
Checking the abroad money exchange rate is crucial before you convert your currency and embark on your journey. While you can trust financial institutions like your bank to give a fair exchange rate, it is always better to know the rates beforehand. If for some reason, you opt for a currency exchange company, you can avoid getting scammed or overpaying. You can find the exchange rate by using a currency converter, at banks and currency exchange companies or by a simple search online from a reliable website.
4. Look out for currency exchange fees.
Currency exchange fees are also known as forex services fees. These are charges that a bank or currency exchange company will levy on you in exchange for converting your currency. These service charges are unavoidable but you can always learn about them before time to see if you are getting a fair deal. You can even compare the exchange fees at different banks and companies. You can also avoid getting scammed by any local agencies or dealers.
5. Look out for foreign transaction fees.
Foreign transaction fees are charges levied by the credit or debit card payment processor or ATM network at your foreign destination. Every time you use your debit or credit card at a foreign ATM, your card issuer, bank, or ATM network will charge a transaction fee to convert one currency to another. While you cannot avoid this foreign transaction fee, you can always minimize it. You can use a travel debit or credit card for this purpose.
6. Know your ATM withdrawal limits.
While you are using your debit or credit card at a foreign ATM, there is a certain withdrawal limit on every transaction. If you go beyond this limit, the ATM processor or your bank might charge an extra fee. If left unchecked, this fee can add up. That is why it is wise to stick to your ATM withdrawal limit. In case you want to withdraw a higher amount, you can always ask your bank to increase your withdrawal limit. While you are at it, ensure you have a four-digit PIN. Most countries accept only 4-digit ATM pins instead of 5 or 6.
Also, make sure to use only authorised ATMs for withdrawing money and use your cards only at reliable stores or restaurants as there are chances of your card being cloned or stolen. If you do misplace or lose your card while travelling, make sure to intimate your bank and travel insurance company.
The Tata AIG Travel Guard Policy covers you against fraudulent charges and reimburses them if you report your card to be stolen or misplaced. However, this is applicable only if you duly report the stolen/misplaced card to your card issuing bank or financial institution.
7. Keep airport kiosks and hotels as the last option.
Airport, train stations, and hotels also provide currency exchanging facilities. This availability can seem very convenient at the last minute. But more often than not, these travel checkpoints give lower exchange rates. They also charge higher commission fees. Why pay extra money for a lesser currency in return? Even in case of an emergency like a lost passport or misplaced baggage, where you feel like you need quick cash, you can get a travel insurance policy to cover their costs.
8. Check for commission fees while using travellers' checks.
Travellers' cheques are basically cheques you can use in the place of hard cash. These are printed and fixed beforehand and issued by your bank. They are accepted almost everywhere and can get exchanged for local currency. They are also replaced easily and within a short time compared to cash. While travellers' cheques offer a higher degree of safety and security, they are quite expensive. Make sure to check with your bank on the commission fees they charge for issuing a traveller’s cheque.
9. Use international banking apps.
You can use international banking apps to transfer money and make payments. Some apps give you the best rate for exchanging money abroad and give you that much-needed security. All you need to do is register on your chosen app and link your bank account, credit, or debit card. Online apps like these also offer value-added features like billing invoices, tracking your spending, and sticking to a budget. Compare the different apps available - some of the popular ones include Mint, PayPal, Trail wallet, Revolut, and the like.
10. Use local currency and then US dollars
Always try and use the local currency of your destination while making purchases and payments, especially while using your card. Most sellers, restaurants, hotels and other hotspots accept US dollars as the US dollar is the standard benchmark for measuring the value of most native currencies. Paying in the local currency should be your first choice as you will not have to pay high conversion fees. Keep US dollars as the next option. To avoid any type of risk, you can compare the exchange rates you are getting for the local currency and US dollars - and pay the one giving you a higher value and lower conversion fees.
11. Be wise with how you store your money.
While there are cashless ways of keeping your money, you will carry some cash for getting through taxi rides, local market buys, and more. Make sure you keep your hard cash safely and at different places so that in case anything gets stolen, you have a reserve at hand. Get a secure and airtight money belt instead of roaming about with a wallet. Also, keep crisp notes. Torn or wrinkled notes can get rejected and pose a problem.
To sum it up
Travelling on an international trip is exciting. But while you brainstorm on the itinerary - give some thought to how you will carry out your financial transactions. Money plays a vital role in ensuring the trip is relaxing and stress-free.
Understand the abroad money exchange rates, currency exchange fees, foreign transaction fees, ATM withdrawal limits and other factors. It will help you maximize your savings and yet enjoy your trip. Make sure you have a comprehensive travel insurance policy to cover you at all times.
Check out Tata AIG travel insurance coverage for all-round protection for your international travels. For more details, get in touch with us today.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.