For much of history mostly gold and silver coins were the money used, otherwise known as commodity money. Commodity money has been used in many forms not just gold or silver. Throughout history anything of value could be used as commodity money. These items include but are not limited to the following: rice, shells, alcohol, salt, and candy. The use of commodity money for transactions is similar to bartering but not exactly.
Today we use fiat money or fiat currency in most areas. What distinguishes fiat money from commodity money is that the commodity itself does not have an actual tangible value. Fiat money refers to notes and coins from banks which are given a face value. In the U.S. this would be the Federal Reserve System. The fiat money is known as legal tender and is accepted to pay for both public and private debts. It’s actually against the law to refuse the legal tender of your country if someone is trying to pay you for goods or services provided by you. This is good news concerning travel currency conversion because if you have the correct tender, you won’t be refused.
Around the world we use different types of currency. Each country is different regarding which currency they’ll accept. Since the value of each country’s currency differs as well, it’s important to know the value of a certain type of money for deciding to do a travel currency conversion.
Now that you have a short, summed up history on currency, you’ll need to be aware that travel currency conversion is a must when traveling to other countries. You’ll need to have your money converted into the currency needed to purchase goods in another country. There are many ways to have your money converted and a lot of different advice is floating around all over the internet. As you read about money conversion, you’ll find that it can be pretty confusing and contradictory when comparing different offers. There are plenty of companies that are ready and willing to help you and get you the best deals. At FairFx, we like to keep it simple, and we have a range of easy to use prepaid cards for spending money abroad. Have a look and see our great exchange rates.
Friday 05 March 2010, 09:12am
Using prepaid travel money is quickly taking over as the preferred way for people to pay for things when travelling overseas.
Not that long ago, the preferred method was to use traveller’s cheques. But just like regular everyday cheques are being rapidly replaced by debit and credit cards, traveller’s cheques are being tossed aside in favor of plastic cards as well. Of course people can always still carry cash, but that is never recommended, as it will not be replaced if it stolen. Every payment option has its own pros and cons, and prepaid cards are no exception. But here are some reasons why more and more travelers are flocking to them.
If you get a prepaid travel money card from MasterCard or Visa, the most widely accepted cards in existence, then you should have no trouble finding merchants that will accept your prepaid card. The way the card works is quite simple. Once you sign up for one, you put in the amount you want put onto the card and the money is taken from a credit card or bank account. The card is then shipped out to you and is ready to use from day 1 as soon as you activate. There are some fees involved when putting money on the card and when you activate the card, but there are fees associated with all of the other methods of currency conversion as well.
If you should happen to run out of money while travelling, as long as you can access a computer or phone, you can have more put on the card no matter you are in the world. Another reason people like prepaid travel money cards better than credit cards is the fact that they control how much they are spending. If your budget is limited and you only want to spend a certain amount, just put that amount on the card and you won’t end up spending more than you wanted to. With credit cards, you likely have a spending limit worth thousands of dollars. You can continue to spend even if you realize you need to stop. Plus, unless you are going to pay the card off in full that month, the amount of interest accumulated across all of your traveling purchases add up very fast.
A prepaid travel money card also is very secure, offering greater security than cash, traveller’s cheques and even credit cards. You will have a unique PIN number given to you and the prepaid card cannot be used without it.
Thursday 04 March 2010, 01:57pm
Carrying cash poses a huge security risk when traveling because if you happen to drop it or if it gets stolen, there is no way to get it replaced. Should you decide to carry cash with you anyways, the country you are visiting may not use that currency, which means you will have to exchange your money for whatever is accepted there.
This will depend on whatever the travel currency exchange rate for that day, as the rate fluctuates slightly from day to day, depending on the global economy. There are also likely to be fees from the bank that switches your money out.
If you want a more secure option than cash, then you can use traveller’s checks. These have been around for quite some time and have been the preferred travel money option until recently. Unlike cash, if your traveller’s checks happen to get lost or stolen, all you have to do is simply call a number to have them cancelled and get more sent out to you. The amount your checks are worth depends on how much you want to put on them and what the travel currency exchange rate is the day you do the transaction. There are going to be service charges involved with traveler’s checks, as well as shipping charges to have them sent out to you.
Traveller’s checks were widely used at one point in time, but just like regular checks, they have been replaced by plastic cards. Things like credit, debit and ATM cards are things almost everyone has on them already these days, so they can just use them while they are on vacation. But even they are subject to have their value change based on the travel currency exchange rate on the day they are used.
Another option that is quickly replacing all other payment options is the prepaid travel card. These also offer a much better travel currency exchange rate. This card offers even greater security than the credit and debit cards, as you have to have a PIN number to use it. In addition, it can also help control your spending better than a credit card will. With a credit card, you are only limited by your overall credit limit, which is likely thousands of dollars for most people. With a prepaid card, you can only spend the amount that you put onto the card. A debit card can limit your spending to only money you have in the bank, but could cause some temporary should a thief steal it and wipe out your bank account.
Thursday 04 March 2010, 09:16am
