4 Common Misconceptions About Currency Exchange

Exchanging currency is a concept that still eludes the complete understanding of both seasoned as well as newbie users of the service. The chain of misinformation and misunderstanding of facts, concepts and information has led to the rise of several myths and misconceptions regarding exchanging from one currency to another.

Currency exchange in Mumbai, which happens a lot, is no stranger to these myths and offer have to take a step back because of them. Here are some common misconceptions about currency exchange that need to be broken.

#1: Thinking that you can predict the value of a currency and when it will go down:

While one can make some predictions about the trends of value in the market for some commodities, for instance, flight tickets before a festive season, the same cannot be said for currency values. Currency rates are theoretical rates, as they are derived from spot rates.

The actual exchange rate which a customer gets is inclusive of the profit margins that various establishments like banks and currency changers apply. Currency rates fluctuate countless times a day as it depends on various factors. Because of this, even the smallest incident can spark a massive change.

#2: Thinking that you lose money while exchanging currency:

The fact that you are paying for exchanging money, rather than directly exchanging it, may lead you to believe that you are losing money during the process. The original value of the cash sticks in your mind and you end up feeling that you made a loss. However, this is not the correct way to think. If you buy a product, there is no way in which you pay the actual price of it.

Apple’s iPhones hardly cost around 200-300 USD, but their prices are marked upwards of 1000 USD. Similarly, when exchanging currencies, you are not simply exchanging cash but availing of a service. Currency changers buy currency at the original spot rates, add their profit margins to it, and then make it available for exchange to their users. A charge for the same is to be expected, and you as a user do not end up with a loss.

#3: Credit cards are better than exchanging currency:

It is not difficult to see why people think international credit or even debit cards are better. They have already paid for it, they are in possession of it, and it is easy to simply start spending and worry later. There is no need of going anywhere or put in any extra effort. However, the reality is far from ideal. Credit and debit cards incur huge charges when used for foreign currency transactions.

Not only are the rates are far from competitive, but the additional charges mean that the only people who can afford such expenses are either Bruce Wayne or Tony Stark (rest in peace). A far better and more sustainable alternative is forex travel credit cards, which offer great exchange rates and incur very low charges, if at all.

#4: Banks are the best places to exchange currencies:

Banks may be the most accessible, well-known and most common places to exchange currencies, but that does not mean that they are the most ideal ones. Banks demand a huge margin over the exchange rates, something most customers would be happy to find an alternative to.

Full-Fledged Money Changers are enterprises authorized by the Reserve Bank of India to provide forex solutions. These companies can make competitive rates much more accessible to customers and provide dedicated solutions. As a result, these outlets must be preferred in place of banks for currency exchange transactions.

Bursting these myths before going for currency exchange is the most profitable way of getting these transactions underway. Learn the truth about the market and plan your exchange accordingly.

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