Currency Exchange - Are You Losing Money?
It used to be the only time anybody was concerned about exchange rates of currencies was the 3 days before or after a vacation. With the ease of purchasing goods from all over the world on internet sites and how even small businesses have gained international customers with sites like Ebay, there are far more instances where we exchange currencies on a regular basis.
We often do not even really realize it since it is all made so easy now. Our credit cards automatically do it for us when we make purchases and the big players in the small vendor markets like Ebay allow banks like PayPal to exchange the currency for us. When travelling for work or pleasure we use out credit cars and ATM cards wherever we are with little thought. This can be a very expensive mistake. While all of these places will happily do the exchange for us, they all set their own exchange rate to their own benefit and as an added profit margin and many even charge additional fees for us allowing them to pad their bottom line with this exchange.
The difference in currency exchange rates can easily very by 10% from place to place. That means trip that costs $5000 in hotels, meals , flights and spending money can vary 10% in either direction on the exchange rates so may actually cost from $4500 for those savvy to check the rates choose wisely to $5500 for those that go with fastest and most convenient. This is more pronounced for those who make many purchases online or thta sell online to international customers. Choosing the card to use based on mileage rewards instead of the currency policy of the card can be very expensive.
To find the true cost of the exchange, you need to look past just the listed fee that ranges from 0 to 3% typically. You must also look at what they base that fee on. While they may charge 3%, if they are also doing the exchange based on a weighted exchange (currency fluctuates every hour of every day so all banks give themselves some extra room in what they use for an exchange and what the actual exchange rate is on any given day - while some will use the rate at a set time on the business day of the transaction, others will add a safety net of another 5-10% on that exchange rate).
The best way to compare rates and decide where to exchange your money is by looking at what rate they are using based off the interbank exchange rate. When you look at their policies of how this rate rate is adjusted and then add the fees to that, you will have the true cost you are paying to use their services.