Everyday life of a person is inextricably linked with money. Every day, millions of transactions worth billions of dollars are being rolled around the world. Stock exchanges and those who work for them all the time monitor the exchange rate and their ratio to prices. Absolutely everything, from billionaires to pensioners, is directly related to money and foreign exchange market. That is why everyone sooner or later faces the problem of currency conversion.
What is currency conversion?
Conversion is the exchange of the currency of a certain state for the national currency of another country. This unique service opens up many opportunities for international trade, travel and various business trips abroad. Some banks provide a service called "automatic conversion." This is a very convenient system, as the exchange of funds takes place automatically when crossing the border. Naturally, the conversion is carried out from its own national monetary currency to the state money of the country where the person is going to go.
Currency conversion can be different, since there is freely convertible money and not. Free conversion is typical for states with a stable economy. For her, there are absolutely no restrictions regarding transactions. A vivid example of this is the euro, although the currencies of another seventeen economically developed states belong to this type. Among them: Hungary, New Zealand, Hong Kong, South Korea, Norway, Switzerland, Denmark, South Africa, Mexico, Israel, Canada and others.
How does conversion work?
As mentioned above, there is a problem-free method - automatic conversion, this is a service that not all banks provide, so it may not be available to many. As experience shows, most often the currency is exchanged at banks or exchange points. This makes it possible to buy or sell the currency of the desired country "without departing from the cash register" in the literal sense of this expression. There is a more complicated way - an ATM. Not everyone is committed to new technologies, so for some people this method seems dangerous and unreliable.
However, in fact, having a Visa or MasterCard class card, you can easily exchange the necessary funds. But there are some nuances here - the intermediary bank takes a certain amount as a commission for the transaction. Whatever it was, electronic money opened the door to money transfers without borders. Being at the opposite end of the globe, you can send money to friends and they will receive it in the national currency of their state. This is a truly unique opportunity.
Is currency conversion always profitable?
It depends on a combination of some factors, and sometimes on coincidence. The reason may be the currency of the card account, the currency of the transaction and the currency of the settlement bank. Often a disadvantageous or double conversion is when checking account the bank does not match the current account of its client. In the event that when paying the currency of the check fully coincides with the currency of the account, then no conversion operation will occur.
Ruble Conversion
Russian money is converted depending on the exchange rate and their ratio to the Russian ruble. With this currency, automatic conversion can also occur.When paying with a card outside the Russian Federation, you should be extremely careful, because in the Visa or MasterCard system, malfunctions can occur, as a result of which triple conversion can take place and extra funds will be written off.
Currency conversion and dollar exchange rate
Dollar conversion is often hassle-free, as this currency is freely convertible. Almost all transactions and transfers are carried out precisely through this currency. Although exchange rates often change, the dollar has always been considered a relatively stable currency. It was declared international money in the last century. Today, everything is still bought and sold in dollars, so its fluctuations most directly affect even those who do not have loans.
When conducting financial affairs, it is worth paying special attention to the currency in which the next expenses will be made. Good financial planning is the key to stable material well-being. One of the best ways to spend a large amount of cash is to deposit it in dollars. It is worth focusing on the general situation, as interest rates often rise by the holidays.
Cash withdrawal abroad
One way or another, when converting large amounts of money, it is important to carefully study the terms of the banking agreement and the financial situation as a whole. It is not enough to know only the conversion rate. For example, when paying abroad, you may notice that the bank charges an additional fee even for automatic conversion. In order not to get into trouble, you need to know the exact amount of this tax. This information can be provided by the bank in which the exchange will take place.
Often there are difficulties when it comes to withdrawing cash abroad. Many are interested in the question of how profitable this is compared to automatic bank conversion. In this case, it is best to cash out money at the ATM of your own bank, the client of which is a person. By doing so, you can see that the commission will be minimal. Otherwise, its percentage may be from two to eight.
