The moment you cross a foreign border becomes the moment you’ll need local currency. You could settle for the transaction and transfer fees from an ATM and make a withdrawal, but what if there isn’t an automated teller around?
Then there’s the moment that you realize your home currency is getting weaker against other foreign currencies. You want to be able to do something about it to protect your wealth, but you don’t know what to do. Is there a way to protect the value of your cash when you need to buy foreign currency?
There is. When you buy foreign currency, you solve all of these potential problems quickly and easily. The practice of purchasing foreign currencies in advance is relatively new for the average household, but the benefits are clear. If you plan on traveling, investing, or sending money to yourself or someone else overseas, then you need to purchase foreign currency without pricey commissions.
Tips To Buy Foreign Currency
You need more bang for your buck. Here’s how you’re going to get it when you need to buy foreign currency:
- Tip #1 – Take Time to Plan Ahead: It is important to give yourself plenty of time in advance if you’re trying to buy foreign currency. The exchange rates are very fluid and can take some time to go through. Making a purchase at the last second means you will be stuck with whatever the exchange rate happens to be at that moment. With a little extra planning, you can make sure your currency is delivered in a timely manner and for the best rate possible.
- Tip #2 – Shop For the Best Offer: People are loyal to a fault. This is great for businesses who build personal relationships with their customers, but it isn’t so great for the customer’s budget. If you want to buy foreign currency, then it is important to look beyond your local bank or the first service that you encounter when searching online to buy foreign currency. Many providers will charge high commissions on international transfers, wires, or foreign currency purchases. It’s also important to remember that there isn’t anything in life that is truly free.
- Tip #3 – Converting Currency Can Be Difficult: The exchange rates and surcharges can immediately lower the value of the money that has been used to trade one currency for another. Consumers can swipe their debit or credit card, of course, but that often means being charged cash advance rates for the foreign transaction. If a payment needs to be made on a foreign mortgage and you have to pay a 3% exchange fee, a 5% commission, and then the higher APR of a cash advance, the value of the cash you hold now loses a lot of value right away.
- Tip #4 – Consider Buying Foreign Currency In Bulk: The reason why large sum investors have always looked to the Forex Exchange as a viable moneymaking opportunity is because bulk purchases have more power. The surcharges and commissions are generally lower and the small changes in the exchange rate could make thousands in just minutes. When you have a need to buy foreign currency, see if you have family or friends who have the same need. Your bulk purchase could save you a lot of money.
- Tip #5 – Sometimes an Exchange Isn’t Needed: The US dollar is used with a fixed exchange rate in many nations. If you are traveling or investing where the exchange rate is fixed, then buying foreign currency may not be needed. Pay with the USD instead to avoid commissions and fees.
- Tip #6 – Avoid the Tourist Traps: To get the best exchange rates, you’ll want to avoid the places where tourists congregate. Larger surcharges and commissions are typically found in train stations, airports, or hotels. Look for local banks or postal offices to get the best rates. Give yourself time to shop around whenever possible. If you can find an exchange rate of 2% instead of 7%, then you’re saving $5 for every $100 of foreign currency you need to buy.
- Tip #7 – Go With the Personal Touch: Exchange rates are constantly moving. This has an impact on your need to buy foreign currency. One of the easiest ways to navigate this sometimes difficult industry is to discuss your specific needs with an organization like Halo Financial. Not only do they have low minimums and offer the chance to save up to 4% on the exchange rate, they offer zero commission charges. They even offer the opportunity to fix an agreed exchange rate for up to 2 years so money transfers can happen when the moment demands.Purchasing foreign currencies should be quick and easy. From spot contracts to one-off purchases, follow these tips to make the most out of your next purchase and consider using an organization like Halo Financial to assist with it. You’ll able to buy foreign currency you need at a fair, competitive price.
Over the years, we have learned from our clients about the best places to buy foreign currency and one of the companies that we hear about time and time again is Halo Financial. Please click on their ad to learn about how they can save you money today.
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Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.
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Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.
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