Are you going abroad? Here’s how to buy foreign currency without paying a fortune in fees

The time has finally arrived – after almost two years of closed international borders, we will soon be welcoming travelers from all over the world and, in turn, we will be venturing abroad to make our own journeys.

If you’re one of the Aussies preparing to travel this year, it’s important to make sure your money is travel-ready too.

Foreign exchange (FX) – or currency conversion – is often a frantic last-minute consideration for many of us before traveling, but a little planning can help your dollar travel with you.

Getting the best deal can mean spending less on fees and rates and more on holiday treats, so here are three tips for managing your next FX trade.

1. Know exactly what you’re getting

There are often many layers to an FX transaction that can be difficult to disentangle. For example, there will be different fees, exchange rates and transfer times to consider for a single transaction.

To keep things simple, look for a currency provider that offers a simple pricing structure (i.e., a provider that offers the same fees) for all currencies and all outlets.

This will help you compare apples to apples when looking for the best exchange deal.

2. Watch exchange rates

Exchange rates change daily, if not hourly, so it’s important to do your homework in the months leading up to your departure.

The aim is to convert your money when the Australian dollar is high against your destination currency.

Some currency providers offer real-time exchange rates so you can keep an eye on the best time to convert your money.

3. Keep an eye on fees

There are a number of fees that may be involved in a foreign exchange transaction, such as processing, clearing and international transaction and/or transfer fees (or telegraphic transfer fees).

Look for transparent, up-front pricing from your exchange provider so you know the total cost of your transaction – and how much you’ll receive. If your supplier doesn’t provide clear prices, you may receive less money in the new currency than you expected.

Bonus tip: think ahead!

If you plan a vacation several months in advance, you can buy currencies in small amounts over time to average the cost of conversion when exchange rates fluctuate.

Multi-currency transaction accounts are useful for this purpose and mean that you don’t have to store physical cash at home for an extended period of time.

In short, we all like to indulge ourselves on our holidays. By researching the most competitive deal before you go, you can ensure you get the best value for money.

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