Find out how to get a better bargain on foreign currency by shopping online in this professional guide.
There has been a recent uptick in the number of people getting their hands on foreign currency by purchasing it online, and one reason for this rise in popularity may be the competitive conversion rates that are available on the web. The majority of banks and supermarkets, in addition to conventional foreign exchange locations such as Travelex and the Post Office, now offer currency exchange services online. Their best rates are frequently reserved for customers who order travel money from them via the internet, so it is in the customer’s best interest to use these services.
Our six-step tutorial will explain how to obtain a great price on currency exchange if it is your first time doing so online, if you are unsure of how the process works, or if you are concerned about whether or not the transaction is secure.
1. Determine the overall cost of exchanging your currency by comparing multiple options.
Before committing your money to one particular offer on the web, it is in your best interest to do some research and comparison shopping, just like you would when purchasing foreign currency on the high street. It is much simpler to evaluate the rates of exchange offered by various websites than it is to call around to various bureaux de change; nonetheless, it is important to keep in mind that rates are not the only factor to take into consideration.
Calculate the overall cost of your transaction before making a decision about where to exchange your money. This should include any delivery or handling costs that you may be required to pay.
Examining the number of units of the foreign currency that you will receive from each service provider in exchange for the amount of pounds sterling that you wish to convert is a straightforward method for accomplishing this goal. Be aware that there are various methods that businesses use to boost charges, which are outlined below and could make your transaction more expensive.
2. Confirm that the minimum exchange rate requirements have been met
Before you are allowed to convert your money at certain online currency stores, you are required to meet a certain “minimum order level.” Therefore, if you only want to convert a modest amount of money, a web-based currency exchange probably isn’t the best option for you.
The majority of the time, websites that deal in foreign currencies demand clients to exchange a certain minimum amount before they are eligible for free delivery and handling. Be careful to include the costs of handling and delivery in your calculation of how much your currency exchange will cost in total if you do not anticipate placing an order for an amount of foreign currency that will be sufficient to qualify you for a waiver of those fees.
3. Keep an eye out for expenses associated with the delivery and handling of foreign currencies.
Depending on where you get your currency from, the normal amount charged for handling and shipping is close to five pounds for each transaction. It is important to calculate whether the total cost of your currency transaction, taking into account the money exchange rate, is still lower than it would be if you purchased your currency on the high street. Even if there is no way to get around these fees, it is possible that it is still in your best interest to pay them.
Some companies that deal in travel money, such as the Post Office, make it simple and convenient for their customers to take advantage of favourable conversion rates that are available online without requiring them to be concerned about the fees associated with the delivery of currency. These businesses offer the capability to order currency via their own websites, with the option to pick up the cash at a store or an airport.
4. When purchasing currencies online, you should keep safety in mind.
You might be concerned about the safety of purchasing foreign currency online, but there are protections in place to prevent fraudulent transactions. To confirm a customer’s identification after they have made an order for currency, certain service providers, for instance, will call the consumer at the number they provided after the transaction has been placed. All of the foreign currency exchange companies that we looked into demanded a signature upon receipt of any money that was delivered, and the majority of them will not deliver currency to any address other than the customer’s house.
It is also important to take into consideration the history of the firm that you are working with. Because the market for foreign exchange is unregulated, you run the risk of losing all of your money if the company you transact with declares bankruptcy. When paying for foreign currency via the internet, exercise the same caution that you would with any other online purchase of an item or service.
5. Be aware of the day on which you are scheduled to get your foreign money.
The majority of websites that exchange currency offer delivery within one or two business days after the customer places an order. However, due to the fact that any travel money ordered online will need to be signed for upon delivery, a member of the household must be present when the package arrives. If no one is home when the delivery of your foreign currency is made, it is likely that you will be required to arrange for another delivery or pick up your money from a post office or other collection point. In the run-up to your vacation, you probably won’t want to deal with something as inconvenient as this!
6. You should avoid paying any fees associated with currency conversion using a credit card.
If you want your currency delivered to your door, you will need to pay for it using a debit or credit card. However, if you choose the wrong type of plastic, you could end up losing any money you saved by purchasing your currency online. It is likely that you will be required to pay a cash advance fee that is somewhere in the neighbourhood of 3 percent if you pay for your currency with a credit card. In addition to this, it is highly likely that you will be assessed interest on your payment from the moment it is processed, and at an increased annual percentage rate of up to 30 percent.
This is due to the fact that transactions involving foreign currency are processed in a manner that is analogous to withdrawing cash using your credit card. This is an expensive move, and the specialists at Which? would always advise against making it. When paying for any foreign money that you intend to have delivered, it makes the most sense to do so with a debit card for the reasons stated above. When you buy travel money using your debit card at some banks, you may be subject to fees of up to 2 percent, but at other banks, such as First Direct, Nationwide, and HSBC, you won’t be charged any fees. If you are unsure, you should contact the company that manages your current account.
7. A cautionary note to readers
There is no security for your money in the event that the online currency supplier declares bankruptcy because foreign exchange is not a regulated activity. This means that you may not get your money back if the company declares bankruptcy. One of the issues is that these companies advertise on their websites that they are “registered” with the FCA, which is intended to reassure customers but does not in fact offer them any protection. This is one of the concerns.
There is no requirement for the Financial Conduct Authority (FCA) to check whether the people running a registered institution are “fit and proper.” Instead, the FCA is only required to verify that the individuals in question have not been convicted of a financial crime, nor have they been involved in money laundering or the financing of terrorist organisations. Not only people on vacation but also people travelling for business could be impacted by this.
Take precautions when transporting cash from another country.
When travelling with and holding foreign currency at your vacation rental, don’t forget to keep safety in mind at all times. You should never take more money out with you than your travel insurance policy would cover in the event that it was lost or stolen. Instead, you should think about keeping it in a money belt, and you should make sure that any cash you leave behind at your hotel room or apartment is stored in a safe.