Looking forward to that holiday feeling? There’s nothing better than putting the “Out of Office” on and embarking on a week or two of rest, relaxation, and adventure. If you’re traveling overseas, the chances are you’ll need to get around to exchanging some of your US dollars for the fiat currency of the country you’re visiting.
You might not be aware that there are ways to get much more bang for your buck when exchanging dollars for other foreign currencies. Within this article, we’ll explain the worst times you can make a holiday money exchange, as well as some of the best tips for maximizing value from your currency transactions and making your holiday budget go further.
A top tip for knowing when to exchange USD for a trip to Europe
If you are venturing to the UK or mainland Europe for a vacation, it could also be beneficial to keep tabs on the DXY. This is a benchmark index that tracks the value of the US dollar against six other valuable fiat currencies, including the likes of the British pound (GBP) or the Euro (EUR). If the DXY chart rises, the dollar is strengthening against the majority of these currencies, making it an ideal opportunity to get the most value for your dollars in GBP or EUR, for example. This index can also be used as a barometer of the USD’s value against the Japanese yen, the Canadian dollar, the Swedish krona, and even the Swiss franc.
Start your currency exchange research at least a month prior to your trip
Don’t leave your currency exchange research to the last minute. Ideally, you should give yourself at least a month prior to your trip to find the best exchange rate. Start comparing with different banks and specialist bureaus online. This can help you to get a benchmark rate, which will make it easier to find stand-out rates.
A month should allow you enough time to decide if exchange rates are going to rise or fall nearer your vacation. If you find that the exchange rate is uncompetitive, you may decide to cut your losses and exchange half of your travel money before you leave and exchange the remainder when you’re on holiday – there’s more on why this can be beneficial shortly.
Specialist online bureaus may offer better exchange rates than high-street branches
Don’t limit yourself to exchange rates available offline with banks. If you give yourself enough time before your trip, you can access rates from specialist online bureaus that may be open to negotiations on discounts, especially if you’re exchanging several thousand dollars for your vacation. Even if you can get half a percent knocked off the going exchange rate, that’s a significant saving, giving you more in your back pocket to enjoy yourselves.
When it comes to exchanging with specialist online bureaus, you’ll often be asked to make the transaction online and await your foreign currency by post. Most bureaus will offer swift, next-day or next-working-day services, as well as recorded delivery for total peace of mind.
Avoid exchanging your travel money at your departure airport at all costs
The last place you should consider exchanging your dollars for foreign currency is at your departure airport. The foreign exchange bureaus at airports typically add a premium to exchange rates because they have a captive market. Some travelers will exchange money here because they feel they have no other alternative and are duped into accepting a terrible exchange rate, giving the bureaus a much bigger margin than usual.
Even if you are strapped for time, it’s better to lock in a competitive exchange rate online and arrange a collection of foreign currency in person at an airport bureau.
You might not need to exchange your US dollars depending on where you’re visiting
Do your research about life in your holiday destination. You might just find that US dollars are accepted in certain parts of the country. For example, some countries in Southeast Asia will accept US dollars as a secondary currency. Cambodia is a prime example of this.
Even in the Middle East, nations like Egypt will prefer payments in USD, which is due to a shortage of dollars in circulation across the country.
You may be able to get a better exchange rate in your holiday destination
There are instances where it can be beneficial to hold onto your US dollars and wait to exchange your currency when you land in your holiday destination. In some countries, you’ll actually be able to get a better exchange rate with their bureaus than if you’d exchanged stateside.
Most travel operators in your holiday destination will be able to recommend reputable vendors that will give you optimal exchange rates for your desired currency.
You may not even need to take cash whatsoever. You could choose to preload funds into a travel card and use it in the same way as your usual credit or debit cards. Just be mindful of deposit and withdrawal fees for these prepaid travel cards, so read the small print before you sign up for any of these.
If you adhere to this advice, there’s no excuse for not getting the best price for your dollars whichever part of the world you’re visiting.