Traveling while abroad isn’t really cheap. It can get even more painful if you’re not cautious while exchanging money. Your carefully planned travel budget can easily be messed by those agencies that use forex traps such as suspicious exchange rates.The forex traps are many. Foreign currency black markets thrive in several countries. The parallel markets function outside the formal banking system. The transactions in such markets are mostly in cash. It goes without saying that using the services of black markets is illegal and may land you in serious trouble.
More about the Forex traps
Many popular tourist destinations have become infested with scammers posing as foreign currency exchangers. They usually accost tourists on roads, promising to exchange their funds at rates below those offered by local banks. The scammers typically steal money while counting and recounting currency bills.
Some legal options may have fine print that might trip you. Take for example “no-charge” bureaus. Though they sound innocuous, their rates are almost always inflated.
The way outs
There are, however, several ways to avoid having to deal with dubious agencies. ATMs may still be a good option for tourists to meet their daily fund needs. Some banks charge higher for use of ATMs abroad and pile on some extra charges. Yet, ATMs remain a safe option for foreign currency. They are also cheaper than most other options, despite all those extra charges. Some banks that have partnerships with foreign banks may have lower foreign exchange rates.
For the big purchases, it is advisable that you use your credit cards. While credit cards charge special transaction fees for buying while abroad, they are still cheap. Credit card companies have provisions that ensure that you get the best of forex rates.
That said, remember it’s unwise to use your debit card to buy stuff while traveling in foreign countries. Botched-up debiting attempts may leave you poor for days as refunds come late. Several technical issues, on the other hand, prevent use of debit cards at certain places in other countries.
Of course, the best way to protect yourself from the forex traps & upheavals of forex rates is to arrange foreign currency before you start traveling. You can also take along a prepaid card that makes traveling a fun affair.
Anuradha Shankar is a mother, traveller, freelance writer, compulsive bookworm.. not necessarily in that order. She lives in Mumbai and aims to travel as much as she can across the country, 10 year old son in tow. Her blog 'A Wandering Mind' is primarily a travel blog, but true to its name it wanders all the time - from events to random thoughts, book reviews to her son's latest peccadilloes!