When travelling in a country other than your own there will come a time when you will need to transfer money. When this time arrives you will have to be aware of the differences in the currency exchange rates that apply. No matter where you come from, or where you are at the time, you will need travel money in the currency of the country you are currently in. It is unwise to carry more cash on you than your travel insurance offers, just in case you might fall victim to foul play, but you will need some cash on hand at all times, simply because you might find yourself in a region that doesn't have any facilities available to withdraw money from your credit card or EFTPOS card.
Exchange Rate Pairs
The value of your travel money is subjected the exchange rate that is applicable to the currency you are trading in and the currency of the country you are travelling through. Cross over a border into another country and the currency conversion rate will change again. This is because the only way a value can be obtained is by matching one currency against another, in other words they have to be paired. If you travel inside your own country you will not be subjected to any change but as the currency of another country will be different to that of your own, the different value between the two will have to be determined.
Values Constantly Changing
There are many variables that determine the value of one country's currency against another and this value is constantly changing, sometimes by the hour or even faster, this is why you should plan your visit to another country with care. To make it easier many travellers change their travel money to American dollars before leaving their own country whether they are from the U.S. or not. This is because you will find many merchants will accept American dollars no matter what country you may be trading in and it is often easier to convert American dollars into a local currency.
Because of the vast differences in currency values between countries you will find it cheaper to buy goods and pay for accommodation in countries with a weaker currency value than that of your own country, (or the American dollars you have had you money converted into). Conversely it will be more expensive for you to pay your way in countries with a stronger currency value.
Check the Costs of Fees and Commissions
No matter how your currency exchange rates turn out, other costs you will have to be aware of will be the fees or commissions charged by the different bureaus in order to carry out the conversion. If you go about it the wrong way your travel money can become unnecessarily expensive. Foreign currency exchange is fast being overtaken over by credit card usage. It depends on the card you have, but in many cases you can save a lot of money by using your credit card instead of changing your cash into a foreign currency. Cash, of course, will remain the easiest to use, no matter which country you may be in but it is also the easiest to have stolen from you or in fact lose. This is why it is inadvisable to carry more cash on you than the amount you are covered for with your travel insurance.
When looking for somewhere to obtain travel money by exchanging the currency you have in your possession into that of the country you are now in, beware of the advertising signs that tell you they will make the exchange for no fee or commission charges. It will not always be entirely truthful, as all these currency converters have to make a living and it is from making money on each transaction they handle. If they state they charge no fees it will mean they will make up the loss by adjusting the currency exchange rate. However they charge, they could still be competitive so it can still be worth your while to check the exchange rate yourself to see how much it will be costing you. You can do this by jumping on Google from your laptop or phone, it has up to the minute exchange rates for all the major currency pairs.
Travellers Cheques are Secure
Travellers cheques have remained a secure way of solving the travel money problems for many travellers. If you keep note of their numbers you can also protect yourself against loss or theft. They can be a more expensive way of doing things however because you will most likely have to pay a fee when you first buy the cheques then pay the exchange rate difference when you go to convert them into a local currency.
There are a number of ways you can obtain travel money while away from home. Much will depend on the country you are in, but as credit card use is spreading into all countries this is usually the safest and easiest. Before doing so check with your card company or bank about its policy when transferring funds in another currency, some cards have been known to charge amounts of up to $20 on every overseas transaction.