Fees, commissions, fixed commissions, withdrawal fees...
The following tips may help you understand how to get the best exchange rates when traveling abroad.
Banks or exchange offices? Changing money in Switzerland or while traveling? How to heat up the bank card ?
Currency rates tend to fluctuate constantly, although most banks update their rates only once a business day. Their fees are sometimes such that they do not take a risk in this.
Given the fluctuations in the foreign exchange market, it is best to ensure that you get the best possible exchange rates and limit the fees you have to pay. Some exchange offices, such as Ben S. Shop & Change in Geneva or some others, will not charge you any fees or commissions regardless of the currency you request. On the contrary, on airports, fees are skyrocketing, and are added to fixed fees, or fixed commissions, added to usurious rates.
Where can I exchange currency before going abroad? Is it better to use a credit card?
To help you save as much as possible on rates, and avoid potential fees for currency exchange transactions, you can use the tips below to plan your next trip abroad. Less spending on unnecessary fees means more savings and more money for your globetrotting adventures.
- Change your currency at your bank
Most banks charge considerable fees and rates depending on the currency you choose. It all depends on your bank, where you live, and the country currency you will need. Some currencies may be available for same day exchange. Other less frequently needed currencies may take a few days to be made available and cost much more than at a Swiss exchange office or in the destination country.
- Changing currency at the airport
If you don't have time to change your currency at the bank before your trip, it can be tempting to get foreign currency at an airport. It's easy, it's fast, but... The general rule is that you will always pay more at an airport. The sad record was recently held by the exchange offices at Krakow airport in Poland, with a 25% spread of fees on a purchase transaction, i.e. when they buy you for CHF 100, you get back the equivalent of CHF 75 in Polish zlotys. Fixed plus commission!
- The exchange offices
There is everything on the spot, in the destination countries. In general, in Switzerland, there is no need to ask too many questions about the rates of the main currencies, some being better than others: no fixed fee, no commission, except at the airport and in the train stations when they still do. Thus, for an equivalent transaction, we can still quote the Ben S. offices . Shop & Change who provided one of our clients with Czech crowns at a very recommendable rate, and had the honesty to tell him to take some on the spot, to make an average, because they knew that in Prague, some exchange offices practice unbeatable rates. Our traveler followed their advice and told us, when preparing his next trip, that in Prague, some exchange offices rivaled each other in various fees and could take up to 28% commission, plus the rate.
Depending on the destination of our travelers, this exchange office in Geneva for example sold them currencies at almost unbeatable rates, or in other cases, just enough to get there. Once there, in fact, if you look around a bit, the rates are sometimes slightly better. Even if the interest of the Geneva money changers would be to sell you currency at any price, some exchange offices like Ben S. Shop & Change will tell you where your real interest lies. They know that if you come back happy with their advice, you will probably come back to them and spread the word.
Another moneychanger had not been so kind, and had sold his entire stock of "exotic" currencies to another of our travelers. On the spot, he realized that he had lost 15% compared to what he would have received with the local rates.
You should always pay attention to this: Buy, Sell, in other words buy, sell. For the exchange offices, this means "We buy, We sell!" It is always the exchange office or the bank that speaks. In other words, if you are in Great Britain and the exchange office announces :
Buy Sell
0.8980 0.8480
This means that they buy your francs at 0.8980 to give you one pound sterling, but only give you back CHF 0.8480 when you bring them pounds sterling.
Beware! In some countries, some clever people take advantage of legislation that does not regulate their profession as much as in Switzerland to reverse the purchase and sale. You will thus have the impression of making a very good deal when in reality, you will not be entitled to their purchase, but to their sale. And when they practice this kind of method, forbidden in Switzerland and in order to put tourists to sleep, it is because their purchase rate is generally execrable. Often, you will be asked to sign a "bon pour accord". Once you have signed, it is impossible to cancel the transaction.
- You can pay by card, but beware of foreign transaction fees and exchange fees. Beware of scams!
Once you arrive at your destination, you can choose to pay with your credit or debit card to make your life easier. But that can pose another problem: foreign transaction fees. Depending on your bank and the card you have in your wallet, your credit or debit card can incur foreign transaction fees of up to 3, 4, or even 6% on every purchase you make in another country. If you are traveling to the United States, the conversion fee will be less than if you are traveling to Colombia.
For example, if you spend a total of CHF 3,000 during your trip using your debit or credit card and a foreign transaction fee of 3% is charged on each purchase, you will accumulate approximately CHF 100 in additional fees. Plus a possible fixed fee per withdrawal. Probably not what you wanted to spend your money on, right?
To avoid these sneaky foreign transaction fees, read the fine print on your bank or credit card website before you travel. You can also call your bank and ask if they charge foreign transaction fees with the type of card, but just because they tell you there are no fees, doesn't mean the course doesn't include them. So this other traveler who was guaranteed by his bank that he would not be charged any fees was surprised to find a 6% difference between the rate charged by his bank and the actual currency rate when he returned from his trip.
- Withdraw from the ATM
Although you may be able to get a favorable exchange rate by using an ATM, your bank's fees and daily withdrawal limits may hold you back. Contact your bank before you leave to find out about the daily ATM withdrawal limits on your account. If your daily withdrawal limit is low, you can sometimes ask your bank to lift the limit so you can withdraw what you need while traveling. You'll also want to know what fees your bank may charge if you use an ATM abroad.
In conclusion
Before you plan your next trip abroad, think about how you want to pay for your daily purchases. Understanding foreign exchange fees, foreign transaction fees, ATM withdrawal limits and other aspects of paying in foreign currencies can help you save a lot of money, a lot of time and make the most of your travels.
Our advice: give priority to Swiss exchange offices, and ask for advice from exchange professionals. They will guide you in the organization of your travels according to their knowledge of the countries and the terrain.
