10 Things to Know Before Buying Foreign Exchange


If you are contemplating venturing into Forex, here are ten crucial details to remember.

  1. Exchange currency well in advance: If you are travelling to a foreign country, this will help you get the best of deals to choose from.
  2. Authorized dealer: Always buy currency exchange from authorities or trusted sources, as a failure of that can be constituted as federal offence and can land you in jail.
  3. No exchanging at the airports: Airports are prone to overcharge at least 5-10% of the margin when you are selling or buying currency. If it is not absolutely necessary, do not trade at airports.
  4. Follow a 20/80 rate: Carry at least 20% of your currency in cash and the rest can be carried in a forex card for immediate and emergency expenses.
  5. Avoid use of debit or credit cards: Simply because using them abroad is highly expensive, along with many extra charges that are levied on it.
  6. Compare exchange rates: Currency rates fluctuate almost every few seconds, so make an informed decision preferably through analytical indicators and reversal trading to get a good rate.
  7. Prefer wire transfer: Carrying large amount of foreign currency is risky. Not only it endangers your security but can bring down notice of authorities wherever you travel.
  8. Don’t use traveler’s cheques: They are outdated and not accepted everywhere, or accepted at 3 to 5% extra charge.
  9. Keep a spare forex card: This way, if one is stolen or broken, you have a backup.
  10. Get rid of leftover currency: Selling or encashing leftover currency saves you from committing federal offence of holding large amount of foreign currency. Many governments choose to ban a currency, which can leave you in possession of useless money.