You just took a phenomenal vacation through Europe and came back with some extra euros. Now what do you do with that currency? Maybe you are planning a trip to Japan and would like to exchange some money before you leave. How do you go about acquiring yen?
Whether you are buying or selling foreign currency, be smart about exchanging it by having knowledge of current rates, service fees and where to make the exchange.
Making an exchange
It’s a good idea to exchange some currency before leaving on an international trip. Then, when you arrive at your destination, you will have at least a little money for immediate expenses like a cab at the airport. While many airports and hotels offer exchange services, they may charge high fees. The best solution, whether you are buying or selling foreign currency, is to check with your bank first to find out if it offers currency exchange services.
Be aware that many banks do not keep foreign currency at their branch locations. At MidWestOne, for example, only our downtown Iowa City branch keeps some foreign currency (euros and pounds) on hand. So do not expect to walk out of your bank with currency in-hand the day you place an exchange order. Be sure to plan ahead; orders may take one-to-three days for processing.
Understanding exchange rates
It’s in your best interest to know about exchange rates before buying or selling foreign currency. While exchange rates are standardized based on the current strength of the dollar, banks can charge different service rates. You can do online searches for exchange rates; however, they will not match the rates offered by banks, since each bank works with its own foreign currency provider. Also, understand there are different rates for buying and selling currency.
At MidWestOne, we are happy to help our customers exchange currency and work with eZforex (ezforex.com) as our foreign currency provider. Our customers can visit the eZforex website for more accurate exchange rates; however, it’s best to give us a call before coming to the bank to make your exchange. You can then determine when to move forward with your transaction so you’ll you get the highest value for your currency.
Using debit and credit cards
Many countries do not have the widespread use of credit and debit cards as we do in the U.S. Be prepared to pay in cash more often when in other countries. However, if it’s an option, simply use your debit or credit card while traveling internationally. This makes life easier because your bank will just be exchanging the money on their end. You can also use your card at ATMs abroad to exchange currency. If you have a major card, like a Visa or MasterCard, you will be able to do basic transactions like making a withdrawal.
If you plan to use your debit or credit card out of the country, remember to notify your bank before your trip so they are aware of possible international transactions. This will ensure your card does not get suspended due to suspicious activity. Also, be sure to check with your bank about any foreign transaction fees you might incur by using your card abroad.