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How Does Currency Exchange Work?

At a currency exchange, you can convert your cash into money you can use in a different country or region. Currency exchanges are businesses that trade various currencies. But this service is rarely free. Currency exchange companies make money by charging fees for the convenience of converting your cash. In addition, the value of your currency on the foreign exchange market can influence the value of your money once it’s converted to a new currency. It’s not as simple as trading one American...

How to Convert Currency

If you plan to exchange money for personal use, expert travelers will tell you to skip the currency exchange kiosk at the airport—they charge some of the highest fees and often have the worst exchange rates. Instead, use a debit or credit card with zero foreign transaction feesand select local currency at the register (if you’re given the option). If you must use cash, make an international withdrawal from an ATM. If you have a bank account in another country, you can also use an app like Wis...

Many factors can impact the value of the currency you’re planning to send or exchange, from economic events to the time of day. If you’re not in a rush to exchange your currency, check the conversion value on a few different occasions before completing the transaction—you may be able to make your dollar (in whichever currency) go further. It may al...

It’s easier than ever to send money to friends and family internationally, thanks to online tools. Apps like WorldRemit and Xoom allow you to send money to people internationally, as does PayPal. But keep in mind that this ease can come at a premium. PayPal charges 4% to convert payments on top of the exchange rate. Xoom (owned by PayPal) charges $...