Learning from my (Mis)Adventures with Foreign Exchange

Tuesday, May 03, 2016

If you are the kind of traveller who is super organized and prefers to have neatly chalked out plans, you will most certainly have a heart attack travelling with me. I thrive on chaos, a little in life in general but a whole lot especially when I'm travelling. This propensity for capricious excitement during my travels often translates into last minute panic where I run pillar to post trying to sort things out.

The headache of cash transactions

Thankfully, stringent timelines don’t allow me any such antics for visa but it is Foreign Exchange that I somehow always manage to mess up, at least a little bit. It all started with my foreign trip ever, to Mongolia in 2014. I was going for a whole month and needed a wad of cash. I booked my airport cab for noon and had no dollars in hand even an hour before my cab would arrive. In fact, I had no idea until then that most of the Forex sales companies in India wouldn’t even consider card payment. They worked only with cash. Since I cannot withdraw more than Rs. 30000 per day through the ATM, I was in trouble considering I had little less than an hour before I headed to the airport. At last, Thomas Cook’s helpful agent sorted things out for me when he agreed to swipe two different cards instead of one cash transaction, saving me a lot of agony in the very nick of time.

Domestic Airport is lesser of the two evils

Another time, quite recently on my way to Switzerland for a short work trip, I needed to convert a small amount into Euros. I was arriving from a small town into Mumbai to catch my flight and so I was prepared to shell out some extra bucks and exchange currency at the airport itself – a small price to pay for convenience, I reasoned. It’s no secret that airport rates are always higher than what we get outside. While I was waiting at the domestic terminal to catch a connection to the International terminal, I went to a money exchange counter to buy some Euros but the agent was not sure if he could proceed with the transaction without my international boarding pass. He suggested I exchange currency at their counter in the International terminal, to which I happily agreed. I got the shock of my life when I was given a Euro rate that was 15% higher than the exchange rate outside at the International terminal. Fancy airport meant fancy fares. With no other choice before boarding my flight, I coughed up the money, not without cursing my laziness though.

Leftover currency woes

photo credit: Day 87 via photopin (license)
If there’s one thing I’ve come to hate now, it is the unused currency I’ve accumulated. I haven’t even been to so many countries yet but I already have a box that’s overflowing with crisp notes and plenty of coins. Small change is the hardest to get rid of and I absolutely hate buying useless souvenirs just to spend the remaining currency. So when I diligently got back all the leftover Euros, notes and many coins, from Denmark to exchange back in India, I got a rude shock when no one at the forex counter was willing to buy coins. This reminds me of the nifty Paypal machines installed in Istanbul’s Ataturk Airport where we could convert the leftover currency into Paypal credit. I wish more airports would come up with something like this. I didn’t try it because I had already bought an absolutely unnecessary mineral water bottle as a last resort with the remaining Turkish Liras but the option seemed very convenient.

These days my preferred way of buying Foreign Exchange currency is online. I am a big proponent of cashless transactions and nothing makes me happier than placing orders from the comforts of a home or a hotel room!

So now that I’ve made quite a few of them mistakes, here are few things I can tell you about forex in India for travellers.

  1. I’m sure everyone knows this but do not exchange at the airport (duh!), especially not at the International Terminal if you have a choice. You’ll end up paying a heavy premium if you buy there.
  2. If you have spare change left, it’s best to spend it at the airport itself, especially if it’s the currency of a country you’ll probably never visit again. Also remember if you’re converting Euro to INR, coins will not be accepted at forex counters. Spend them all!
  3. Instead of paying a visit to a physical counter, you can easily upload the documents and pay online. You can then have the currency either home delivered or pick it up from set locations. But keep in mind that you cannot pick up currency you’ve ordered online at airport counters.
  4. In Turkey’s Aataturk airport you can exchange the small change to Paypal credit; I think it’s better to have money in Paypal with a lower exchange rate than forcing yourself to buy unwanted souvenirs in the airport.
What’s your preferred way of getting forex in India?
Also, if you have any tips for lazy me, I’m all ears!

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  1. Gosh what perfect timing. Travelling to the UK from Monday and haven't got any forex yet. I always end up going to the bank last minute and they always end up having very little to give unless you have given them prior notice.

    I would like to try and buy forex online. Which sites do you use?

    1. I've actually never tried buying forex at a bank so far, wonder how competitive the prices are! I have been buying from Thomas Cook (Here's my referral link - http://ow.ly/4nmpla) all this time but looks like many other promising sites have sprung up like bookmyforex.com of late.

      Also, have a great time in UK! :)

  2. My international travels have been limited to at most 9-10 days, so I would normally estimate the amount I would need for 2 days and get it India. Rest of the money I would withdraw from ATM in foreign land. Again I would estimate how much I would need so that I pay transaction fees at most once which is fine. This helps me to get rid of carrying too much cash. Banks normally have a bad exchange rate, so I also rely on Thomas Cook to get the forex.

  3. So agree with the "what to do with the leftover currency" ordeal! And your first tip is for clueless travelers like me, who duh exchanged at the airport because laziness :D

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  5. 1. if you are traveling longer or going to spend lot of money - it is best to take money required for first 1-2 weeks in cash (generally USD/EUR/GBP/JPY) and rest in the form of travel card/ATM cards. I am generally comfortable having USD 1,000 about me while I am traveling. I keep 100 on me and rest in dorm/room locker. Carry your own lock.

    Cash - I generally prefer buying from bank as they charge 1-1.5%. If you find any money changer that charges in that range that would be great as well but I trust banks more. Note there is clear distinction between fee of Indian govt banks and rest. Most govt banks have outrageous conversion rates. I prefer HSBC, Citi, StanC, DBS and Axis.

    You can get prepaid travel card from any of the good banks in India in all above 4 currencies. Charges involved would be - initial currency conversion fee (about 1%) at the time of loading money in India and withdrawal fee (about USD 2-5 per withdrawal) while abroad and reverse conversion fee (same 1%) for any left over amount once you return to India and do not need the card any further. There might also be service fee & tax at the time of getting the card issued first time. It depends on bank and should be about INR 500-700. Obviously all these are negotiable. Just speak to the bank official.
    Convenience: First time you will need to visit bank, but there after you can do everything online - you can even request duplicate card in case of loss, load money into card, etc.

    For folks who prefer ATM: charges would be foreign currency conversion fee, foreign country transaction processing fee levied by Visa/Master Card/Amex. These are generally to the tune of 3%. ATM withdrawal fee could also be there depending on bank and same as above USD 2-5.
    Most convenient way but a bit expensive.

    2. if you are traveling short term or don't need much money, ex: all your hotels and tours are pre-booked, sticking to cash in above 4 currencies is best in my opinion. Side note - book your tours once you are in location rather than online, things are cheaper 90% of time that way.

    Definite DON'T DOs:
    1. never use credit card to withdraw cash at foreign ATMs. Along with all charges mentioned in above ATM cards bit, you will also pay cash withdrawal fee of 6%. On the other hand making purchases using credit is similar to ATM card (3% fee) and obviously withdrawal fee doesn't apply.
    2. never use airport exchange people. As Neelima pointed out they are the highest fee method. There are some situations where you land in airport with just USD or such and without any local currency. I'd use ATM card to withdraw smallest local currency amount I can withdraw in airport and then go into city. If your ATM is not enabled for offshore transactions then convert $50 or some small amount sufficient enough for commute to city and dorm deposit. Rest convert once in city.

    Unfortunately none of this can save you from small left over change. Use for food, chocolates and drinks in airport :) Also larger $ bills such as 100s and 50s are worth more than small $ bills.

  6. Forex cards work so much cheaper, at least for me they did. there was a small issue when using it at a restaurant, but it was resolved when I contacted the customer care. the best part of using these travel cards against credit cars is that you get it done at the same exchange rate once and for all. when using my credit card, the exchange rate obviously fluctuated and i ended up paying a huge bill. And I am always apprehnesiveabout using cash all the time as I tend to loose it (even in India :D). Here's the post that finally made me try out forex cards instead of using cash or my credit card http://blog.buyforexonline.com/which-is-cheaper-cash-or-card-what-are-double-conversions


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