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Currency exchange becomes one of the important parts of your daily routine when you are,
However, there are more viable options than using cash every time. Moreover, it can cost you a lot more than you had expected.
For instance, say you were in a different state and needed to make an online transaction or even use your card for the payment. The bill can be more than expected due to the hidden exchange rates you never knew about.
Yes, using a card keeps you from fraud, high commission fees, and overall security, but that’s not all about it!
The main question is, how to get the best exchange rate on your card?
And this is exactly what we are here for! So, let’s dive straight into the information you have been looking for.
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According to Investopedia,
“An exchange rate is considered a rate at which you are going to change your local currency with a foreign one.”
However, this is not the end of “what exactly does an exchange rate mean.”
In fact, when you purchase any foreign currency by giving them your local money, it brings some after-effects.
These are:
And a lot more.
Therefore, it wouldn’t be naïve to say that a good exchange rate is much more than getting a handful of money for your tour or some purchases outside the parent country.
But, since our main focus is going to be on “how to get the best exchange rate on your card,” it is better to resort to the basics.
Here’s a comprehensive yet simple video to understand the concept better:
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Before you jump into the pool of knowledge on steps to get the best exchange rate on your card, let’s see how currency exchanges work.
Basically, the exchange rate is divided into two parts
The floating exchange rate, as the name suggests, is prone to sudden change due to different factors, like:
On the other hand, a fixed exchange rate comes with a definite period with little to no change.
When it comes to current standards or rules for currency exchange, mostly free-floating exchange rate policy is used.
This is why the exchange rate is important and plays a major role in an economy’s outlook.
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Finance experts advise using credit cards instead of cash to handle payments in a foreign country. The top reason to do so is the exchange rate. In fact, converting money might be more costly to some than simply letting the bank do the exchange.
Moreover, you can also earn points and rewards by using your card!
Now that you are done with the basics, it is time that you get the best exchange rate on your card instead of the other way around.
Sounds interesting? It surely is! So, let’s find out how to do that without any loss!
The first and foremost tip to get the best exchange rate on your card is by increasing your financial literacy and literally keeping yourself updated on everything related to money exchange!
Moreover, how do you think you can make better decisions about something when you don’t know its current status? Yes, it’s as simple as that.
Keeping yourself updated about the ongoing situation can let you know about:
And so much more!
Mainly, when you know everything already, it’s hard to miss the hidden fees or any scammy exchange.
So, next time you are planning a trip to your favorite destination, make sure to keep an eye on everything going on in the market currently.
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You might read endless guides that tip you to use the currency exchange service of the airports if you forget to bring in some extra cash. However, we here at Plastk will only advise stuff that’s actually helpful for your trip financially.
Here’s why avoiding the airport currency exchange is recommended:
So, why waste your hard-earned money just for the sake of “convenience?”
Moreover, not using airport currency exchange kiosks also has its benefits. For instance,
Therefore, it is always best to pause before doing so at the airport unless you need immediate money due to an emergency.
This is the most important point to note since we are already talking about getting the best exchange rate on your card.
But first, you must be completely knowledgeable about which card you use and how to use it best.
For example, using a secured credit card means:
And a lot more.
On the other hand, when you use a usual credit card (unsecured), it often results in issues like
Therefore, be wise with your choice of card and make currency exchange hassle-free for yourself.
Note: You can also get better rates if you research the typical credit card section to compare what works for you and what does not.
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Just like the choice of the card can make or break your currency exchange rate, other options also play a key role.
For example, when you purchase something as a part of your holiday budgeting or anything else, make sure to pay in local currency instead of in your own currency.
This is especially the case when you are using your card.
This is because paying in the local currency would cost you your hard-earned money like paying in your own currency would.
Otherwise, you never know how much you are being charged, as you can’t do the calculations on the spot unless you’re a finance pro.
Last but not least, be extra careful when using the exchange service at an ATM. Mainly because you never know what currency exchange rules the banks follow in a foreign country.
Also, there might be extra charges for the ATM, and you also have to deal with an expensive exchange.
However, visiting the said bank or even a broker can save you from paying extra fees against every transaction you make at purchasing different items.
The exchange rate varies due to the dynamic market and worldwide economic matters, making it even more important to equip yourself with the knowledge-packed points that will help you while you use a good credit card.
However, not everyone is that smart and acquainted with financial knowledge. Heck, most of us don’t understand the basics of finance, let alone the economics of currency exchange!
Therefore, we have curated this guide for all those beginners that don’t know how to get the best exchange rate on their credit cards!
So, give it a read; hopefully, you’ll find this article useful!