Minimise your overseas spending with these money exchange tips

When preparing for international travel, one critical decision is where to exchange your money, and how much to change. While cashless payments is increasingly common in many destinations internationally, having cash with you is still rather important. Let’s explore some considerations that you might have when making a decision of where to exchange your money, when to change it, and how much to change.

Cash payments vs Credit card payments

As cashless payment become increasingly popular and common worldwide, many people might have a preference to simply use credit cards in their daily lives — and this preference is likely to extend to their payment habits when traveling internationally.

While credit card and cashless payments are convenient, it is important to note that:

• Credit card exchange rates are typically much worse than if you were to exchange currency at a money changer
• Most credit cards charge a transaction fee for foreign currency transactions

This means that if you were to use your credit card to make payments overseas, it is highly likely that you will be paying more than you would have if you were to use cash payments.

Of course, while the rates might not be as good and you might end up actually paying more than you would need to, credit card payments also comes with perks like miles accrual or cash back, depending on your credit card terms.

If you will be making credit card payments, always choose to make your payments in the local currency. This will help you to minimise your losses due to unfavourable exchange rates and currency conversion charges!

Use digital wallets to help you save on currency exchange rates and fees

If you are using cashless payments primarily because of the convenience and not so much because you want to accumulate miles or credit card points, using a digital wallet might be a good option.

Today, there are many digital wallets such as Revolut or Wise that allows you to have multi-currency wallets. These services typically offer much more favourable exchange rates than normal credit cards.

Should you exchange cash at home or abroad?

If you will be planning to change some cash, you might be wondering if rates are more favourable if you were to change the money when you are at home or after you arrive at your destination.

Well, it really depends on where you are traveling to. While it is generally believed that the rates would be more favourable if you were to exchange the currency abroad, it isn’t always the case.

Changing currency at home makes it much easier for you to shop around for the best exchange rates. On the other hand, if you are not familiar with the destination that you are traveling to, you might not always be able to find a money changer and it might make it more difficult for you to find the best rates.

An advantage of exchanging cash abroad is that they typically have smaller denomination of the notes available, which might make it much easier for daily use. On the other hand, it is important to be on a look out for counterfeit notes — make sure you head to a reputable and authorised establishment for your cash exchange.

And even if you do decide that it might be better to change your money upon arrival at your destination, it is highly recommended that you at least change some cash first so that you are not stranded in case you cannot find a money changer upon arrival.

Exchanging currency overseas vs ATM withdrawals

Of course, there is also the option of making withdrawals at ATMs overseas in case you run low of cash. ATM withdrawals are definitely more convenient and reliable than looking for a money exchange service.

However, ATM withdrawals do not always provide the best rates; and depending on your bank, there could be additional charges for ATM withdrawals.

Worst places to exchange currency: Avoid exchanging cash at these locations

Many people may choose to exchange cash at the airport or at the hotel due to the convenience that it offers. And not only is it convenient, it is reliable and you wouldn’t have to worry too much about counterfeit notes.

But, the exchange rates at the airport and the hotel are often really bad. These locations typically offer some of the worst exchange rates. And perhaps, exchange rates don’t matter that much if you will only be changing a small amount of money.

Save money on your travels with a Nomad travel eSIM

Aside from money exchange, there are many other ways that you can save money even while traveling internationally.

One of the easiest ways to save money while traveling internationally is by avoiding international roaming costs by getting a travel eSIM. Travel eSIMs provide you with connectivity internationally at near-local costs while doing away with the hassle of having to switch out a physical SIM card.

Nomad offers travel eSIMs in over 170 destinations worldwide at rates from as low as USD 1.10/GB. And if you will be traveling to multiple destinations, Nomad also offers a variety of regional plans that allow you to enjoy uninterrupted connectivity as you travel through the different countries.

If you share your Nomad referral code with your friends, your friend will be able to enjoy $7 off their first purchase (only applicable for plans $10 and more). You will also be able to enjoy $7 off your next purchase (only applicable for plans $10 and more).