Should I change most of my money in my home country or in the destination country?

Question

Where can I get more favourable exchange rate, in general?

Answer 1

This varies very much depending on your country of origin and your destination. Best exchange rate mean lowest spread, but keep in mind, that some banks apart of the spread, also charge extra commissions.

Keeping that in mind, there are some general tendencies. Exchange rates, from best, to worst:

• electronic transactions (i.e. transactions made directly with the credit card). These usually have the lowest spread (or none at all for major currencies) and typically using major credit cards there is no extra commission. This is the preferred option when you're traveling in developed countries.
• cash withdrawal (usually ATM, note however, that on rare occasions when paying with card, it'll be actually charged as cash withdrawal). This usually has decent spread, some banks charge commissions, some don't. Your Mileage May Vary. Check availability of ATMs accepting your cards beforehand. In some exotic countries you'll only get them at main airport. (btw. some banks/ATM operators charge fixed or minimum fee per transaction, so it's better to make one bigger withdrawal, than a number of smaller ones).
• money exchange at your bank, i.e. withdrawing money from your account in other currency. Problem with that is, that it's impractical to carry around large quantities of cash when you're traveling.
• local money exchange, least favorable, but in really exotic countries that might be your only option. Especially when you're in situation, that you've run out of local currency and you're not anywhere close to civilization.

The exception are countries, where the money is not fully and freely interchangeable. In that case most often black-market exchange will give you much more than the official ones at banks. However, using black-market you're exposing yourself to fraud.

Answer 2

It depends not on which country is your home but which country offers the best exchange rates.

Since you have not listed either where you live or where you're planning to go we can't give you more specific advice.

But here's some general advice.

Usually the richer a country is, the more expensive money changing is.

Developing countries often want major foreign currencies like USD and EUR and will offer better rates for them than you'll get buying the foreign currency of a developing country in the US or Europe (or Australia or Japan etc).

Places with a black market can sometimes offer even better than official exchange rates for the big currencies so the dodgy money changers on the corner can give better rates than the banks or official money changers. But as they're dodgy know your numbers and don't get scammed!

Another thing to keep in mind is "How exotic is the currency of my destination?" If you're going somewhere with a stable world currency like USD, GBP, EUR, AUD, JPY, etc you can change those pretty easily. If you want something a little more interesting like Albanian leks or Armenian dram you might not be able to change them at home at all but you will certainly be able to when you get there. Especially if your destination country has an expat community in your departure country.

This all of course assumes that you definitely want to phsyically change money. If in fact you really want to know the best way to deal with money issues while travelling, then Gagravarr's answer deals with that more general problem

Answer 3

I would observe the trend of the currency of the home country versus the foreign country's currency before making a decision.

If the currency of my home country (the dollar in my case) were falling, I would try to exchange it as soon as possible, which is to say before I leave home, to get more foreign currency for my dollars.

If the dollar seemed to be rising, I would exchange it as late as possible, meaning when I arrive in the foreign country. The main exception would be if the "spreads" around the basic exchange in the foreign country were much larger than in the U.S. Then I might do the currency exchange at home,or in a third country, even if I expected the dollar to rise against the foreign currency.

Answer 4

It is much better to exchange monies in the country of visit but make sure you go to forex bureau as they always offer better rates compared to border money changers. Or ask your tour guide in the place of visit, in most cases they always know the offers and good prices.

Answer 5

My normal advice is in this answer, which is to get a card without foreign exchange fees and take the cash out while you're over there. You'll generally get the best rate by far with this, and you don't have the safety issues of carrying round a week's worth of money in cash.

If you are going to be somewhere without access to ATMs, so you need to take cash (either your own currency to change, or pre-change into the destination one), then there are some general tips. Firstly, airports will often give a poor rate, as they have a captive market and an expensive location. Next up, make sure you know the real rate, and shop around. Be aware that "commission free" normally means a worse rate (they still want to make a profit!), so normally only makes sense for small transactions. For large ones, a commission plus a great rate is often better, but get a calculator out and check!

Before you go, check what rate your bank will offer you (it may be good, or it may be shocking, so know what the real exchange rate is). See what you can get online, but don't forget that will involve a postage fee and a wait! Then check with the post office, and if you live somewhere touristy, try a bureau de change near you. (Where I live, we have lots of american tourists, so you can often get a good rate if you want to buy USD, but rarely if you want to sell them!). Finally, try and check (either online or on the phone) what rate you can get at your destination.