Money changers are a fact of backpacking life. Sadly, some budget travelers fall victim to cunning tactics because they’re unfamiliar with the destination, there’s a major language barrier, or these scheming money changers are simply too good. To help you a bit in dealing with this, here are several very useful tips.
Tip No. 1: In most countries, money changers ask for your valid ID.
Money changers, per local laws, require your valid ID so they can proceed with the transaction. Your passport is usually the best option. For security purposes, however, budget travelers like you may opt to leave your passport at the hotel and present a colored photocopy instead. This requirement is true for many countries like Singapore, Thailand, Italy, those in the Middle East, and those in the European Union.
Money changers may also accept international driver’s licenses, but not always. Some don’t require ID’s in places where enforcement is lax, but it’s better to bring an ID so you won’t waste valuable time.
Tip No. 2: Money changers like major currencies in higher denominations.
Backpackers should bring major currencies in higher denominations whenever possible so you can get better rates. US dollars, Euros and Japanese Yen are the most widely accepted. If you don’t live in the US, EU, or Japan, you can still buy US dollars from your local bank.
Local brick-and-mortar money changers typically offer two rates: one for the highest denominations and another for the lower ones, with the first rate being more favorable than the latter by around 5 percent. For example, a money changer along Legian St. in Kuta, Bali, Indonesia, offers USD:IDR = 1:11,700 for 100 USD bills, and just USD:IDR=1:11,200 for 50’s, 20’s, etc., a whopping 4.5% difference.
Tip No. 3: Banks are money changers, and they’re your safest bet.
Banks are typically the best money changers and most of them will accept major currencies without requiring you to open or maintain an account with them. I usually research about the banks surrounding my hotel before my flight and check which ones offer the best rates. However, if you don’t have the time to do this, most banks post their daily rates right at their front door.
Backpackers like you may also have the option of exchanging currency at the airport, but the rates are usually very low. This is why you may want to exchange just enough to cover taxi fare to the hotel and other urgent expenses. Unless you’re familiar with the local scene, I suggest that you deal with companies with easily verifiable reputations. Better be safe than sorry.
Tip No. 4: Count your money before leaving the money changer.
Remember to count your money before leaving and while still in front of the counter. If there’s a discrepancy, you don’t want this to be a case of your word against theirs. You may also want to have people around you so there are witnesses in case things go wrong. Shady establishments will easily figure out that you’re not a local through several means, such as your accent, the way you look, or even the general manner in which you conduct yourself – and they may take full advantage of that fact.
Tip No. 5: Be Alert. Avoid money changer scams.
Most money changers post their rates in their shop front and some of them entice budget travelers and backpackers by posting absurdly good rates. But then, there’s always a catch. If you’re gutsy enough to go to a local money changer, at least be familiar with the most common tactics used by fraudsters.
For example, some offer extremely high rates but ask for substantial commissions. Some use wads of smaller bills to overwhelm and confuse. There are those who use similarly-colored bills with lower value. The list goes on and on.
Do you have other useful tips or experiences to share? Please leave a comment below!
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Money Changer Woes? Here are 5 Helpful Tips!
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