When I talk about buying currency, I’m not talking about Forex. As fun as it sounds to write 5,000 words on a process that’s about as complex and dangerous as having diplomatic relations with North Korea, it’s just not my focus in the article. What I’m really talking about is buying currency for your next holiday.
After all, there’s nothing worse than sitting at Changi Airport, waiting for your flight when it suddenly dawns on you that you need foreign currency. Unfortunately, by the time you realize your mistake, you’re left with two options: 1) accept Changi airport’s ridiculous exchange rate, or 2) accept the ripoff exchange rate at your destination airport.
But you can save time and money by planning your foreign currency purchase ahead of time with the following options:
Buy Currency through a Money Changer
The most popular way to get your hands on some foreign currency is through a money changer. Of course, the exchange rates can vary greatly, depending on how much “competition” a money changer has. In areas where there are only one or two money changers, the rates can be so bad that you’ll probably get a better deal from your friendly neighborhood Ah Long.
Instead, head to the places where money changers are competing against each other for your business. This will save you money, especially if you’re purchasing a lot of foreign currency.
Here are three places in Singapore that will give you a fair currency exchange rate:
- The Arcade at Raffles Place: Located at 11 Collyer Quay, the Arcade at Raffles Place is the place to visit if you’re working near the Central Business District (CBD). The money changers here are very transparent about their rates, which makes it easier to compare and choose the right one.
- Mustafa Foreign Exchange: Located at 145 Syed Always Road, the Mustafa Foreign Exchange is the money changer of choice for Singaporeans who enjoy the convenience of picking up cheap currency and shopping next door at Mustafa Centre. It’s also open 24 hours.
- People’s Park Complex: Located at 1 Park Road, People’s Park is another popular currency exchange hub near Chinatown. Like Mustafa Foreign Exchange, it’s a place where you can take care of your pre-trip shopping as well. Just be prepared for some queues during peak hours.
Buy Currency through a Bank
I believe that loyalty is something that should be shared by both parties. Why stay loyal to any person or institution that takes your money without giving you much in return? No, I’m not speaking about local politics. I’m talking about the banks! Seriously, you don’t have to remain “loyal” to the first bank you opened an account with.
In fact, opening savings accounts with multiple banks gives you access to the financial services of each – including currency exchange. Typically, the banks offer decent rates that are +/- 1% the rates offered by money changers in the places above, which is still better than getting ripped off at the airport.
Want to know the rates that banks are buying/selling their currencies at? Check them out with the following links:
Buy Currency through Your Credit Card
Technically, this isn’t a way to “buy” foreign currency. I know, some of you will think me crazy for suggesting that you use your credit cards overseas. Yes, using credit cards overseas does incur foreign exchange charges and interest fees for overseas transactions. However, there are a couple of important reasons why using a credit card overseas may be better than you think:
- For Safety: Anyone who has traveled to Spain and France will tell you about the pickpockets there. Needless to say, walking around with a pocket full of cash isn’t exactly smart. But it’s much smarter to bring a good credit card with you do your holiday shopping. If your credit card ends up as pickpocket’ loot, you can just call your bank to cancel it.
- For Perks: Good frequent flyer cards provide you additional bonuses for spending overseas, such as additional air miles and points when you spend in a foreign country. Don’t have a good credit card for use overseas? You can find one on SmartCredit. of them provide you with FREE travel insurance as well! For our updated article on the best air miles cards, stay tuned with us on Facebook.
Again, walking around with a thick wallet in a foreign country won’t attract the kind of crowd that it will in say… Clarke Quay or Pangaea. So instead of buying too much foreign currency, allocate at least 20%+ of your holiday budget to credit card use just to be safe. Also, don’t forget to activate your card for overseas spending!
Know any other unique ways to buy currency for your holiday excursions? Share your experience on Facebook! And to find even more useful information on everything personal finance, visit MoneySmart today!