People buy foreign currency for many reasons. You may wish to purchase Forex as a hedge against depreciation, or because you are traveling abroad. Many people buy foreign currency to send to someone else who is living abroad. Whatever your reasons for buying or selling Forex, you will always want to pay the lowest possible charges. Banks have been found to be the most expensive way of buying foreign currency. Not only do banks levy high charges on sending/receiving domestic or international wires, they also charge premium rates for converting currencies.
As such, currency exchange companies have sprung up all over the world. These companies effectively reduce or eliminate wire transfer fees and associated high commissions, and offer travelers the best possible rates on currency exchange. There are many options available to you when taking currency abroad. Experts advise travelers to use credit cards with no foreign transaction fees. It is ill-advised to use such cards at automatic teller machines (ATMs) since extortionary charges will be levied by the foreign bank ATM and your home bank. Cash advances will quickly eat into your capital and erode it away.
What Is the Problem with Conventional Currency Transfer Services?
When you order foreign currency through your bank, you are going to be hit by fees, commissions, and other costs. If you choose to go via banks, do it online. In-bank currency purchases are more expensive. Banks have the added advantage of preferred borrowing rates since they deal with huge sums of money daily. They can get currency for their customers at better rates, but again they tack on many additional charges that you won’t be paying elsewhere. If you withdraw cash from your bank’s branches overseas, you will also be hit with fees in the region of 1% – 3% if it is an in-network ATM. For these reasons, you will want to compare travel money rates before you part with your hard-earned cash. You may also need to pay international transactions fees which will necessitate fewer trips to the ATM and bigger withdrawal amounts each time. This is a security risk and a costly option.
Why Is the UK Leading the Way with Currency Exchange?
The United Kingdom is the epicenter of the Forex market. The City of London in particular is where the bulk of global Forex trading takes place. As such, the UK has many top-tier money transfer services available. These are highly regarded and oftentimes provide far superior service than the big banks. It is always a good idea to research the money transfer providers available on the market.
These include John Lewis Travel Money, Travel FX by Global Reach Partners, TorFX, FairFX Travel Money Rates, The Currency Club Travel Money Rates, Covent Garden FX Travel Money Rates and many other reputable providers. The providers in the UK operate under the rules of the Financial Conduct Authority (FCA), and HM Revenue and Customs. As such, clients can rest assured that all operations are legitimate with these reputable service providers. Outside of the United Kingdom, banks typically run the show. This is quickly changing in the United States and Canada where many alternative money transfer services are now available
What Is the Best Way to Exchange Money When You’re Going on Holiday?
The tide has shifted from banks to reputable money transfer providers. In the UK, there are a myriad of highly regarded providers that offer better services and rates than banks. Banks typically buy currencies at the best rates, but charge customers much higher rates. This is pure profit. The wire transfer fees for incoming and outgoing wires at banks are extortionary. As such, your best bet is to evaluate the rates at top UK providers, and compare them based on your preferences.
Money transfers for personal use such as going on vacation are going to be smaller than for setting up a new business. Therefore, you will want to ensure that your currency exchange rate is favourable, and that’s where flexible currency purchases by money transfer providers beat the banks. They will wait for you to get the best rates before initiating currency purchases. Banks simply purchase the currency as soon as you seal the deal. Shop for the best rates before you consider going to banks.