Exchanging money in Mexico can get very expensive.

Planning a trip to Mexico can be stressful unless you know exactly where you’re going and what you need to do before you get there. Trip planning is not just about flight details, hotel reservations, restaurant choices and local attractions; there are other important things to consider before you leave home. Traveling through Mexico is an exciting adventure, but it can turn into a costly, risky nightmare if you don’t exchange currency before you leave home. Mexican police added more patrols in Mexico City’s Airport last year, because thieves were attacking arriving tourists immediately after they exchange their currency for Pesos. Not only did the tourists pay a higher rate to exchange money in the airport, they risked their own safety to do it.

Internet currency exchange sites are not much better.

Some travelers do make an effort to exchange currency for Pesos on the Internet before they leave home, but they do it without researching the currency market first. Websites like Western Union, Travelex, Wells Fargo and Bank of America are all known for money transactions, but the fees they charge for these transactions can be as high as 23%. For every $1000 you exchange you pay up to $230 in extra fees, which means you have 77% of your budget left for trip expenses.

The value of the Peso is always fluctuating, so unless you follow the currency trading market consistently, meaning every hour, chances are you’re going to blow part of your budget on a phony Internet exchange rate. Visa, MasterCard and American Express will exchange your currency to Pesos online, but not without adding a hefty profit to each transaction. They also add a fee to each credit card purchase while you’re visiting Mexico.

What strategy can I use to save money when I exchange currency for Pesos?

Veteran traveler’s do research and asks questions before they start exchanging money, especially if they’re using the Internet. The first question to ask is: Who is promoting the Internet exchange site? If it’s a financial institution, you can bet they are making a nice profit on each exchange. The next question is: Does the website offer good advice about exchanging currency? Some websites offer you advice based on inaccurate research, or the information is based on personal experiences, which may not apply to your situation. The third question is: Is the advice real time advice, or is it outdated information? Some websites post information that no longer applies to current currency exchange facts and figures.

The two most important things you need to know in order to exchange currency and save money in the process is the current rate for your exchange pair and where to get that rate. In other words, if you’re exchanging American Dollars for Mexican Pesos, you want to know what the actual exchange value is for that pair at the time you make an exchange. A professional currency broker can give you that information. The next thing you need to know is where you can get that rate of exchange. Once again, a currency broker will exchange your currency using a real time rate and will notify you when the market fluctuates, so you can take advantage of the natural movement in the market. A currency broker will help you average your exchanges before you leave home, so you avoid a sudden surge in the value of the Peso. A currency broker does make a couple of points on each transaction, but you will save money when you use one. If you have Internet access once you arrive in Mexico, you can continue to exchange your currency with a broker quickly and efficiently.

Saving money when you exchange currency will give you more money to spend on the things that count, like duty free souvenirs or that sombrero you can’t live without.

ForexTraders.com wrote this article to help save you money before you travel to Mexico. To learn more about currencies and the several factors to consider when doing currency trading, such as; a country’s economy, undercapitalization, brokers, technical and fundamental analysis etc, visit ForexTraders.com.

Flickr photo by Lucy Nieto

When is the best time to exchange currency for a vacation?

A vacation in another country is always an exciting thought. Planning a trip to any or several Latin American countries takes patience and research. Finding the right hotel, special attractions and good restaurants can be an issue, especially if you’re traveling to smaller cities like Merida in Mexico to check out the Mayan Temples. The vacation budget is the travel gospel for most people unless they just won the lottery and the currency exchange market gives it credibility, if you exchange money wisely. Waiting until the last minute to exchange U.S. Dollars for Reals for a trip to Brazil can be a budget nightmare. The global market is constantly changing and if the Dollar just moves 1000 points over the course of a few days, it will cost you $100 for every $1000 you exchange. Getting that news when you arrive at airport in Rio is a not only a budget breaker, it’s a wake up call.

Seasoned travelers exchange small amounts of money while they’re planning the trip. By exchanging small amounts of money at different times before the trip you can average your exchanges to protect yourself from sudden currency shifts. You also know what each exchange costs, so you can build a budget on facts not fiction. Averaging also protects you from sudden surges that can happen to currencies like the Brazilian Real. The Real can increase in value overnight and destroy a vacation in a matter of hours, unless you have been averaging your exchanges with a reliable currency trader.

Where should I ?

Most of us believe that a bank will give us the best rate of exchange, but banks add a fee to every exchange and they may only post one or two rates a day. The currency market changes every hour, so you may not get a real time rate. Credit card companies adore you if you use their services when traveling. They use their own rate which includes a built-in profit and they add a surcharge on every holiday purchase, so you don’t know what the trip costs until you get the statement. Airport currency traders may add a hidden fee to the rate which means you have fewer dollars to spend on the trip. A reliable currency trader can help you average your exchanges while you’re planning the trip. A profession will give you a real time rate so you avoid excess fees, surcharges and bogus rates that destroy your budget.

Other travel thoughts

Always carry cash in a money belt or a hidden pocket that’s secure and out of sight. Wallets and purses are easy targets, so just carry a little cash in them for travel incidentals Hotel safes and other security measures should be used when you arrive and common sense is your best security tool if you use it. Some countries limit the amount of cash you can carry through customs. If a random custom search finds you exceed that limit, your money could be confiscated.