What to Know about Converting Foreign Currency
Not much in life is more thrilling than anticipating a trip to a foreign country. But even experienced travelers can be thrown when dealing with foreign currency and exchanges rates. Next time you’re headed abroad, familiarizing yourself with the local currency will be a great way to prepare for your trip – and protect your hard-earned dollars while you’re there.
A few things to know about converting foreign currency:
- There are 180 different currencies in the world.
- The “exchange rate” refers to how much it costs to exchange one currency for another.
- Exchange rates fluctuate frequently.
- Cash can be converted, or exchanged for a different currency, at currency exchanges, online, and at banks and other institutions.
What’s the Equation for Converting Currency?
The relative worth of currencies against one another changes from day to day. That can make understanding the value of the Japanese yen, Indonesian rupiah or British pound a bit
confusing. But the basic formula for determining the exchange rate is pretty simple. To do so, divide your starting amount (original currency) by your ending amount (new currency). The answer is your exchange rate. So, if you convert $100 into 80 euros, the exchange rate is 1.25.
Don’t worry, other people will usually do the math for you. You can also look up the rate via an online exchange rate calculator. But it’s helpful to know the rate in order to grasp the relative cost of things where you’re going and budget accordingly. Understanding the exchange rate helps you know you’re getting the most bang for each buck you convert or spend.
Get the Latest Exchange Rate of Currency Where You’re Headed
The rate you were given before your trip may have altered slightly by the time you get off the plane, although probably not by much. And that’s ok. Being a savvy traveler, you’ll already be familiar with the relative difference in value. For example, if a US dollar is equal to roughly 20 Mexican pesos, then you can prepare to think of a peso as similar to a nickel. Getting used to these unfamiliar bills and coins will give you a sense of the cost of items during your travels – and help you avoid getting overcharged!
How Much in Foreign Currency Should Your Convert?
Until recently, there were fewer choices when it came time to pay the bill in a foreign country. Cash and traveler’s checks were the go-to methods whether you were backpacking through Chile or heading to Europe. Credit cards could be tricky and, while convenient, can still have hidden fees attached. Fortunately, there are many more payment options to choose from, although what’s accepted may also depend on where you’re traveling.
That said, how much cash to convert depends on several factors. Your prepaid debit card or credit card will likely be accepted at some of the hotels, stores and restaurants where you’re headed (check their websites for details). However, for smaller purchases at markets and street vendors, cash in the local currency may be your only choice. It’s a good rule of thumb to convert at least enough to get you through a day or two of cab fare, meals and other necessities not paid for in advance.
Converting Your Cash at CCEA
Community Currency Exchanges (CCEAs) are known for many things – money transfers, check cashing, driver’s license services – and yes, as the go-to place to convert dollars into foreign currency and vice versa. Whether you just got back from a trip abroad and want US dollars for those leftover euros, or you’re getting ready for your next big adventure, your local CCEA can help you out. Here’s how:
- Bring your foreign or domestic currency to your neighborhood CCEA location.
- An employee will crunch the numbers and make the conversion for you based on current rates.
- There is generally a fee for converting currencies.
- You leave in minutes with the currency you need in your pocket.
Sure, a large financial institution can handle this service. But a simpler, more convenient choice appeals to anyone who would rather not drive out of their way just to stand in line at a bank. Plus, CCEAs offer a wide host of other personal finance and auto-related services that you can take care of while you’re here – all under one roof!
At Currency Exchange, we’re happy to provide instant cash when you come in to exchange your currency. Call your nearest location to find out what foreign currency we carry. Whatever we don’t have on hand, we can order!
With over 350 locations, many open nights, weekends, and holidays (and several stores with 24/7 availability), you can rest easy knowing your financial needs can be taken care of when you need them most. We’re in the heart of every community. Don’t believe us? See for yourself.