Home Cruise Safely How Not To Get Ripped Off Exchanging Currency

We had finished our tour and were wandering the market in Ha Long Bay, Vietnam while waiting for the next tender back to our ship. It was very hot, so my friend and I decided to get a couple bottles of water. We found a small food stand and the fresh springs rolls were calling to us. So we ended up ordering two bottled waters, two cokes, and six spring rolls. The bill came to a staggering 32,000 Dong. The ship’s briefing mentioned that the dollar was accepted widely so there was no need to exchange currency if we were only making small purchases. The exchange rate would not be the best, so if you were making large purchases it would be better to exchange Dollars to Dong beforehand. I told the lady I only had dollars and she whipped out a calculator. I handed over my two Dollars and got 10,000 Dong in change.

Travel Tip #1: Currency Exchange – Know Your Currencies

While most cruise ports will accept Dollars, Pounds, and Euro’s readily for purchases, the exchange rate they offer may likely be well below the official rate or the one you can get at currency exchange outlets. One thing that many new travelers may not understand is that exchange rates and purchasing power are not the same. While a dollar will get me 21,000 Dong in Vietnam and I can but two or three cokes, the same dollar will get me only .90 Euro in Germany. I might be able to buy a small coke. So before exchanging any money, get a little understanding of your buying power. There are a number of currency applications available that will not only tell you the current trading rates of currencies but also acts like a calculator to convert prices. They are very useful though you might not want to walk around a crowded market with your cell phone in your hand. A good alternative travel tip is to have a small cheat sheet. A number of currency websites have the ability to download a palm size cheat sheet that you can print out and use to calculate conversions.

Travel Tip #2: To ATM Or Not To ATM That Is The Question

In addition to knowing the “official” or trading rates, there are a few other things that you need to be aware of to get the best possible exchange. Currency exchanges can operate on a fee or no fee concept. In a no fee arrangement the company makes their profit on the spread between the buying and selling rates, while a fee arrangement is collected separately from the exchange. The fee is generally a percentage. The Fee arrangement will post better exchange rates then a No fee arrangement, however after the fees it may be worst. Do your best to avoid currency exchanges at an airport or directly where you get off the ship. Here is an example from Thailand last year. At the Bangkok airport before customs is a currency exchange. A $100 bill would have gotten you 2,850 baht. After customs, the currency exchange would give you 3,100 baht, while one near the shopping districts in the city were giving 3,250 baht. That is more than a 10% spread. Also note that most currency exchanges give less for bills smaller than $50.

Many travelers are now relying on their ATM cards to make currency exchanges. They withdraw at a machine with the same logo as their card and receive their money in the local currency. This method has both its positive and negative aspects. First you do not have a large amount of cash to worry about and you do get the best exchange rates, generally within 1% of the inter-bank rate. It is very convenient in most locations as ATMs are very common The key difference is how does your bank deal with the transaction. Many banks charge a fix fee plus a small percentage and a small conversion fee. Check with your bank to see what the fees are and use that to determine whether to bring cash or use credit cards.

2 replies to this post
  1. The last paragraph in the article is the most important. Prior to visiting another country I check with each of my credit card issuers to see which one offers the least expensive atm transactions, and also credit card purchases.

  2. Three points:
    1: Use a debit card to withdraw from ATM’s in order to avoid credit card interest on a cash withdrawal.
    2: Use cards that have a zero “Foreign Transaction Fee”. My cards vary from 0% to 3%. Discover (a charge card) has no fee; good for purchases but not ATM withdrawals. Ask your bank to rescind or reduce the fee. Sometimes it’s possible – my bank once returned a fee of over $200.
    3: Use old technology if you know how. I carry a pocket size circular slide rule and use a small piece of “Scotch” tape to hold the scales at the local conversion rate. One glance and a bit of thought is all that’s needed to get a close estimate of the $ cost. This is the handiest thing I travel with.

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