It can be both thrilling and terrifying to travel to a new place. You've probably invested significant money and time in planning your trip, from accommodation to arranging transportation.
After that, you will also need to take some more time to consider how you will pay for expenses when going abroad and if you should pay with cash or a debit card.
It is also worth noting,you will need to pay an additional transaction charge if you use a debit card at any foreign ATM.
So, keeping this in mind, let's understand how you can minimise charges while withdrawing money from a foreign ATMs.
If you are buying something abroad, the seller may ask you whether you want to be charged in the local or your home currency.
The bank (or the merchant) translates the purchase from the local currency on your behalf if you choose to pay in your home currency.
The issue is that there may be an additional price for such transactions, and the conversion rate will be considerably higher. Additionally, those expenses might not have been disclosed to you.
Let's take an example. Julie (from America) had lost her earring in Amsterdam and had to buy a replacement immediately. However, when buying, the merchant asked whether she would like to pay in Euros or USD. For the local currency, it was €57, while for her home currency, it was $63.53.
She agreed to pay in Euros, the local currency, and paid by card, bringing the cost to around $60.53, saving her almost $3. In this case, though, the markup for paying in US dollars was as high as 4%. This could go even higher.
Dynamic currency conversion is a convenient way for banks and even some merchants to pile up additional fees on unsuspecting customers.
While withdrawing money from a foreign ATM, you will be asked if you wish to withdraw with conversion or without conversion.
If you select "with conversion", the bank will go on to add an arbitrary exchange rate that will include a spread than the interbank exchange rate.
On the other hand, if you go for "local currency", your bank will handle the currency exchange. So, you would be able to benefit from your bank's exchange rate as compared to the high exchange rate of the ATM service provider.
However, it's best to carry travel money in cash so that you can avoid the hassle of withdrawing cash. You can buy travel money from an online currency service provider like The Currency Club, as we will help you avoid the inconvenience.
With us, you have access to live interbank exchange rates, and you get the best exchange rates coupled with transparency and fast service.
We have made every effort to ensure that the information published here is correct and accurate, however you should check and confirm the latest exchange rates with The Currency Club directly prior to making a decision. The information published is general and does not consider your personal objectives, financial situation or particular needs. Full disclaimer available
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A page for us to share with you our thoughts on everything to do with with foreign exchange and much more. From new product launches and widgets to political announcements, market insights and even where to head on your next holiday look no further, you'll find it all here.
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