When studying in a foreign country, you will have to deal with currency exchanges. Depending on where you are studying, currency exchange rates can either help you get great bargains or make your stay even more expensive. However, no matter how strong your home currency is in relation to the local currency, you will want to make sure you get the best exchange rate possible in order to keep your expenses low.
What is an Exchange Rate?
An exchange rate represents the relative price of two currencies. For example, the dollar-euro exchange rate implies the relative price of the euro in terms of dollars. If the dollar-euro exchange rate is %0.95, it means that you will need $0.95 to buy €1.
There are certain strategies you can use in order to make exchange rates work in your favor.
Know What Your Bank Charges for Foreign Transactions
Most of the time, you’ll find that you get the best possible exchange rate when you use your credit or debit card, either to make purchases or withdraw cash. Some banks and credit card companies, however, will charge you a fee on foreign transactions, so make sure you do some research before leaving home. Call your bank and ask them what they charge. If they charge a fee, consider calling around and asking other banks what they charge. If you plan far enough ahead, you may be able to find a better deal.
Know the Currency Exchange Rate
Find out what the current exchange rate is before you leave your home country. This is readily available in many newspapers or online. You should also periodically check the exchange rate periodically during your stay, as knowing the current exchange rate is your strongest defense against getting a bad deal.
Plan Your Budget Carefully
It’s best not to carry a lot of cash with you, but you should also try to arrange it so that you have enough cash with you that you don’t get stuck having to make a currency exchange at high rates. You’re more likely to get a rood rate in large cities than in small towns.
Take Out Cash as You Need It
This will help you to minimize the risk of being robbed or pickpocketed. It will also help you avoid getting stuck with excess cash when you return home.
Try to Exchange Currency at Banks and Post Offices
Whenever possible, try to avoid the exchange companies and Cambio booths that you will find in most train stations and airports. Although they are certainly convenient, they frequently charge very high prices in exchange for that convenience. If you need cash, it is best to find a large bank or post office.
If you are using exchange kiosks, it is especially important to shop around and compare exchange rates. However, the rate you get can vary even from bank to bank. You should compare at least two or three different places before you settle on one.
Know the “Real” Rate
Sometimes the low rate that you find posted will be the “sell” rate (you’ll be charged the “buy” rate), or will only be applicable on very large or very small transactions. You may also find that there are flat fees added to each transaction or extra commissions based on the amount of the exchange. Remember to watch out for these tricks and find out in advance the net amount you will receive from an exchange.
Carry a Calculator
Converting from one currency to another can be confusing, and if you’re dealing with large sums or if you’re traveling in a country with high inflation, you will be grateful to have a calculator to help you with your calculations.