Get Good Currency Exchange Rates
The Dynamic Wealth Report
May 9, 2008
Five Tips On Currency Exchange
A few weeks ago I attended a wedding in California. I flew into the Bay
Area a few days early and met up with some old co-workers and friends. I
had a great time seeing everyone, and catching up on the latest gossip. But those stories are for another time.
The wedding was for a good friend of mine. The gathering was small, and
I felt honored to be part of the celebration. The ceremony was
beautiful, and for an outdoor wedding you couldn’t have asked for better
weather. The reception was great. And If I do say so myself, my moves on
the dance floor were second to none.
Later on I found out the happy couple would be traveling to Europe for
their honeymoon. As a matter of fact they’re there right now!
A few days ago though they called me from the currency exchange window
at the airport. They were concerned that the posted exchange rates looked off.
And the fees . . . let’s just say the mob has nothing on these guys.
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For those of you who don’t know, I edit a newsletter on currency trading
called Currency Options Insider.
After traveling the world and exchanging more currency than I care to
count I've learned a few things about the currency markets. Armed
with this experience, I focus on finding ways to
profit from fundamental and technical movements in the global currency
markets.
Now, I don’t usually give advice to tourists about exchanging money for vacations or
honeymoons . . . but this was my good friend. I had to help him out.
After passing along my sage advice, it occurred to me that my readers
would benefit from this knowledge as well. Keep these tips in mind when you travel and
you’ll be able to save yourself some money.
This is what I told him.
Foreign Exchange Tip #1 - Notify Your Bank and Credit Card
Companies Before You Leave
Let them know that you’ll be traveling abroad. I learned this lesson the
hard way. My credit card company didn’t know I was in Europe. When
international charges started appearing they tried to contact me. When
they couldn’t reach me my card was canceled. They assumed the charges
were fraudulent.
It was nice of them to protect me like that. But you can imagine the
look on my face when I tried to pick up a dinner tab and my card was
rejected.
Foreign Exchange Tip #2 - Most Banks and Credit Card Companies
Provide Good Exchange Rates
Since you're calling anyway, take an extra minute to find out what fees
they charge for foreign exchange. Usually the fees are
between 2% and 3% per transaction. Surprisingly, I've found that I get better exchange rates
using my credit card - even with the additional fees.
Now, when I travel internationally I use the credit card that offers me
the lowest fee. Because the credit card companies handle huge numbers of
transactions they’re able to get very competitive exchange rates.
Many of them will pass these rates on to their cardholders.
Foreign Exchange Tip #3 - Don’t Tip Your Bellboy With A Credit
Card
Sometimes you have to pay with cash. It’s a fact of life. Cabs, bars,
museums, and public transportation usually don’t take credit cards. This is
where a little advance planning can really pay off. Call your bank a few
weeks before you leave. Most major banks can convert hundreds or
thousands of dollars at a decent exchange rate.
The fees are nominal and depending on your bank you might be able to do
this with only a day or two's notice. I've found that exchanging
currency through my
bank is easy. . . . as long as I plan ahead.
Foreign Exchange Tip #4 - ATM's Are Good In A Pinch
As an investment banker when a client called we jumped. Sometimes that
meant dropping everything and going straight to the airport. On several
instances I barely caught my flight with bag in hand. Getting to the
bank beforehand just wasn’t possible. Short of keeping a stash of
various
currencies locked up at home I discovered a secret.
ATMs work overseas. If I’m traveling internationally and find myself
short of cash I head right for an ATM machine. Flip your ATM card over. On the back are logos of various ATM networks.
Some of the larger ones are Plus, Star, and Interlink. If you use an ATM displaying those logos
the withdrawal process is very easy.
Just remember you are traveling internationally so use caution when
flashing your cash. One other thing. Local ATM are used
primarily by natives. Don’t be surprised if the ATM uses the
native language of the country you're visiting. Even so, they're
still very easy to use . . . the process is just like it is
in the US.
The nice thing about ATMs other than convenience is that they also offer competitive exchange rates. There is a nominal fee of $3 to $5 but that’s a small price to pay for
the ease of getting foreign currency.
Foreign Exchange Tip #5 – Your Hotel Will Usually Exchange
Small Amounts Of Cash
If you need a quick $20 or $50 you can try your hotel’s concierge desk.
The rates won’t be great, but they'll be better than the currency exchange
huts. This is convenient, but sometimes you’ll have to pay a small fee.
Remember, since this isn’t the main business of the hotel they’ll limit
the amount you can exchange. Also they sometimes run out of money
so don’t wait til the last minute.
When you get back.
I hope these tips help you to get the best exchange rates and lowest fees on your
next trip overseas. Remember, when you come
back to the US the left-over currency in your pocket has a lot of value.
Call your bank and have them exchange your paper foreign currency back to
US dollars. Your leftover coins can be a great gift to the
children in your life. I give mine to my nieces and nephews . . .
always with a great story filled with international adventure.
• Deutsche
Securities upgraded R.H. Donnelley (RHD) to a Hold from a
Sell rating. This company is a regular feature on our “ Worst Year
To Date
Losers” list. In the last few months RHD has lost almost 80% of
its value.
• DRS Technologies (DRS) was downgraded this week by Friedman Billings,
Morgan Joseph, and UBS. DRS recently announced they were in
discussions to sell the company. The stock rallied almost 10 points on
the news.
• Citigroup rolled out coverage on a number of solar companies including
Evergreen Solar (ESLR), First Solar (FSLR), and
Sunpower (SPWR).
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