Most people still think that the government or money markets set the exchange rates. Actually, the exchange rate is just a price you are offered when changing money and anyone dealing with currency can set any rate they like. I mean this quite literally; on the chip and pin machines you can type in the exchange rate you want for foreign currency transactions.
When I was researching this article I spoke to someone who said quite literally that if you want to change money in Pakistan to take a local with you as you will get a better exchange rate. It was one of the ‘perks’ to use their exact phrase.
Not everyone going to Pakistan is going to be of Pakistani descent, so how do you get a decent exchange rate and why would you care?
The average British traveller to Pakistan takes about £500 in spending money with them. Scanning around the travel money providers comes up with three exchange rates an ‘onboard rate’ in this case from Saga; the high street banks (HSBC) rate and the online exchange rate. The difference between the best and worst rate would buy you about £37.60 MORE currency by buying online than the on board rate and nearly £20 more than the best high street rate. What is more, buyig online you can order today and have your money tomorrow, on the high street you are looking at a minimum of two days to order your travel money before you can collect it. Have a look at your travel plans and you may find that the saving would pay for your first nights hotel or atleast a meal out on that first night all effectively for free.
£20 notes for free
If you found £20 in the street and there was no one around who could have dropped it you would probably think it was your luck was in and it would certainly put a smile on my face for the rest of the day. You can get double that just by being prepared enough to order your money in advance.
Now, call me paranoid but anywhere where they can give you a better deal if they think you are local can also probably give you a worse rate if they don’t like the look of you. I personally would not feel comfortable with trying to complain if I felt ripped off in a foreign country where I didn’t speak the language. For that reason I would always look to buy my travel money before I travelled.
What I cannot do is tell you where to buy your travel money. As I said before anyone can set any rate they want but the important factor is competition. The so called ‘onboard’ rate is for people who are on the plane or ship and cannot go anywhere else to so why should they bother to offer you a good deal? When you get on the high street you are looking at a handful of travel agents and banks, so the rates improve a little. Online you can easily check tens of providers in minutes and so the rates improve to try and get your custom. This is supply and demand in action and for once it works in your favour. Lets face it if you are readig a blog then you can search online so you can get these better deals.
As a final comment the savings may not sound too great and they equate to about a 7.5% saving by buying online but if someone was to offer you a savings account that paid 7.5% interest over a year you would probably jump at the chance. Right now you can get 7.5% more spending money in a single transaction.
What I would be interested to know is…’if you have changed your money in Pakistan where did you get the best deal?’ Share that information and you could help hundreds of fellow travellers. If you know that then please leave a comment below.