The exchange rate you get will make a huge difference in how much it costs to buy travel money or send money overseas.
The problem is, every bank and currency exchange company quotes different exchange rates.
You can make sure you are getting a good deal by negotiating a better exchange rate. It can make a difference of hundreds or even thousands of dollars depending on how big your transaction is.
This guide will show you some easy ways to get a better exchange rate and save some money.
When you should negotiate exchange rates
Pick your battles. Not every time you buy or sell currency will you need to negotiate. Generally speaking, if you are buying or tranferring less than $500 worth of currency, it might be hard to get a better deal.
The 3 most common situations in which you should negotiate are:
- You have a large amount (transaction)
- You have been offered an awful exchange rate which you know is uncompetitive
- Business Transactions
If you need to make an international money transfer of more than $5,000 overseas or you're buying more than $1,000 in travel money, you should be comparing exchange rates and trying to find the best exchange rate.
Awful Exchange Rates
Sadly, this is very common.
So, what is an awful exchange rate? Basically if you can find a significantly better rate with little effort (60 seconds of googling)
As an example, if you are buying US dollars and a bank offers you 0.6600 and you can easily find an exchange rate from a reputable currency exchange provider for 0.6800 , then it's probably worth looking around.
Businesses Should (but don't always) Get a Better Rate
Australian businesses get better exchange rates than the everyday person walking off the street. This is largely because they do larger transactions, more frequently. This means that they are seen as more a more valuable customer and so they are offered better exchange rates.
Once again, most Australian businesses don't know they can get a better exchange rate and so they end up missing out on thousands of dollars each year by sending money overseas at uncompetitive exchange rates.
Negotiation Techniques That Work
Compare Exchange Rates
The best tool you have to negotiate a better exchange rate is comparing exchange rates. If you know the exchange rates that each bank and currency exchange company in your local area are offering, you are in the best position to negotiate a better exchange rate.
It happens all the time when we buy TV's, kids toys and hardware. You take in a price of a competitor and your local shop matches the price. Buying currency is no different. Just like other products, not every bank or currency exchange is willing to price match so do your homework. Travel Money Oz currently have a best rate guarantee similar to Bunnings or Officeworks.
It's Easy to Ask
9 times out of 10, it only takes one question; ‘Can you offer me a better exchange rate for my amount?'
Most of the time, you will either get a better rate or a polite refusal. Without asking, you will never get a better exchange rate.
Get Professional Help
Getting help is particularly helpful when you are dealing with very large amounts – more than $10,000 in travel money or an international money transfer of more than $20,000. A professional currency consultant can compare exchange rates and negoiate on your behalf.
The Currency Shop proudly offers this service to Australian businesses and individuals living locally or overseas. To find out more, call 1800 004 930
It's Your Money
Finding, comparing or negotiating a better exchange rate is much easier than it used to be. It can be as simple as comparing exchange rates online, making a phone call or asking for a better rate from your bank.
At the end of the day, a better exchange rate allows you to keep more of the money in your pocket.
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