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That’s why you can pay a lot if you pay by card abroad



Before the holidays, it can be a big dilemma for many to switch cash now or just have a credit card to get the local currency anytime you need it. We have calculated which is the best solution.

When changing money, the formula is pretty simple. Before you get started, let’s assess how much money we may need and exchange it. In the case of an exotic country, you may often need to buy a more internationally accepted currency at home, such as the dollar or the euro, and then convert it locally to the local currency.

The cost of this depends on the currency exchanges and the exchange rate used there, so our total cost is the difference between the selling price of the bills and the average exchange rate.

Your credit card / credit card

Your credit card / credit card

As Allan Homes, the editor of SeesBank, told us, the formula is much more complicated for bankcards. Not only are currencies that are difficult to obtain at home, there are double conversion rates here, but also in all countries that do not use the dollar or the dollar as their currency.

In such a country, when making a card purchase or withdrawing money, the currency in question is first converted to the dollar or euro at the rate of VISA or MasteCard, and then in one of these currencies it converts a claim to our bank at the exchange rate of our bank.

Of course, if you use the card in one of the two major currencies, there is only one currency exchange.

Currency exchange or credit card?

Currency exchange or credit card?

So let’s look at how much one solution costs and how much the other solution will cost when we travel. The transaction fee is not calculated at this time as it will be payable in the same way for each transaction.

 

Let’s go to Germany!

Let

We want to spend $ 900 outside, which solution is cheaper? At the moment, one of the cheapest official currency exchanges (US $ 305.60 / euro) has to pay $ 275,040 for that amount . In contrast, banks:

As you can see, we found a better exchange rate in 2 banks than in the money exchange. In other places, you have to pay more at the conversion, and even the withdrawal fee is added if you do not pay by card but use it at an ATM.

Let’s travel to Turkey!

Travel to turkey

It is harder to find a lira at a good price, but with a little research we can find it for 115 USD. Let’s say we get a good deal out of 3,000 lire, which we can get for 345,000 dollars . Of course, the situation is different in banks. First, based on the prices of one of the credit card companies, it is converted to a larger currency, in this case USD, at a rate of 0.480607. Our bank will then receive a claim of $ 1,558,179 , which will be converted at its own selling rate into dollars. While it may be cheaper to exchange money for card purchases and withdrawals in a foreign country, we should be aware that if you are the victim of a crime abroad, you will virtually never get your cash back while blocking your credit card can easily prevent similar losses. With card purchases, you also have a lower chance of staying in excess foreign currency, which we need to redeem later, with further losses.

Also, be aware that many banks charge not only high fees for withdrawing money abroad, but often charge a foreign exchange rate instead of a foreign exchange rate, which may be less favorable for us.

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