Avoiding Unexpected Costs When Travelling Abroad
International travel is becoming much more popular these days, as a larger number of countries can offer overseas flights, internet ensures constant connectivity with co-workers and family back home, and hotel accommodations are more, well, accommodating. But just because international travel is more common, it does not mean there is no research that needs to be done before buying your plane tickets and stepping on board. One important factor that must be considered is the international conversion rate, as this is one of the biggest elements that will determine the total cost of your trip.
Currency Strength or Weakness?
“First, we must understand that currency strength is a great thing for international travel,” said John Gordon at NordFX Company. “This means that all of your foreign costs will be less expensive.” So, for example, if the Australian Dollar has been falling in recent months, it might not be the best idea to take that international trip. But it is also important to have an understanding of the strength or weakness of the currency in the country where you will be travelling. So, if you plan on flying to Japan, for example, the ideal situation would be one where the Japanese Yen has been falling and the Australian Dollar has been rising. This will help cut your costs significantly when you are making your international purchases.
Dynamic Currency Conversion
Dynamic Currency Conversion (or DCC) is a service offered by credit card issuers that allows you to make foreign purchase transactions automatically, without having to exchange your domestic currency. Of course, there are fees for this service but the fact is that smaller foreign exchange shops tend to give unfavorable exchange rates that actually end up costing you more. Your credit card issuer has strong relationships with large international banks, and this allows them to offer you the best possible exchange rates. The fees for these services are nominal, and it is much more convenient to simply use your credit card for purchases rather than to carry around wads of foreign cash.
For all of these reasons, it should be understood that currency exchange rates can drastically alter the total cost for your trip. If you plan accordingly, watch the latest market news and utilize the benefits provided by your credit card issuer, you can save on your trip — and potentially have the ability to travel abroad more often. It is important to travel during instances where your domestic currency is strong, and the currency of your travel country is showing weakness. At the same time, frequent travelers should shop around for credit cards with low foreign transaction costs. There are actually credit card issuers that will wave foreign transaction fees in their entirety, so if you feel this type of card is something you would regularly use this is another way for you to drastically reduce your the total costs for your trip.