A rate of exchange is the comparative value between two different currencies. When you travel, you need to make a currency conversion. It is the process of converting your currency into your destination country’s usable currency. Based on the current rate of exchange, you may receive more or less value after the conversion to the local currencies of countries of your visit. The exchange rate will define how much foreign currency you can buy with your 1 US dollar, for example, how many Euros, Spanish Pesos, or Thai Bhat you can get in exchange for your $1.

Before you leave your country to travel, you should know the rate of exchange. This will give you knowledge on how much is a US dollar worth in the country where you are going to. Because the currency conversion rate varies most of the time, a 1 US dollar in your local country of residence may not be equivalent to 1 US dollar in your destination country. In this case, you can budget your expenses accordingly. It will be helpful if you do not exchange your dollars for a local currency all at the same time. However, there are currencies that are stable enough and are hardly affected by fluctuations, in which case you will be far off from losing in value when you do the conversion to these stable currencies.

When you are abroad and would like to make a currency conversion, never rely on another country’s storefront money changers or street kiosks. It is highly likely that you will not be given a fair rate of exchange. If you have checked the exchange rate online before you left for another country, or you have gone to a bank and inquired there, it means that you know what the current exchange rate is. You can have your money changed with a street money changer, provided you will be given as close a figure as the current rate.

The rate of exchange in your debit card is usually the best deal. You can’t expect the street vendors to give you the same rate as your debit card, or the number that you saw online. The street kiosk owners are located strategically, and their stores open early and close late. This is the same reason why the items in a convenience store are highly priced, and why the street rates are higher than that of a bank.

The Euro and the US dollar are the acceptable currencies used for international business. Many of these businesses have their prices quoted in their local currency and either a Euro or a US dollar. But when traveling outside of their country, people should make a currency conversion, so they can use the bills of the destination country during their stay there. Hotels, restaurants, shop keepers and some financial institutions that do not have the facility or staff to make the conversion often prefer that foreign visitors use the local currency in all transactions.

You can make a cash currency conversion before leaving abroad. Many large banks, currency exchangers, and travel agencies can exchange your US dollars to another currency.

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