As the year-end approaches, consumers preparing for international travel are facing reduced currency exchange burdens. The won-dollar exchange rate, which once exceeded 1,500 won per dollar, has fallen to the mid-1,300s, while the yen remains stable at around 840 won per 100 yen. Since the cost of travel can vary depending on the timing of currency exchange and payment methods, interest in exchange strategies is growing.
According to the Bank of Korea on November 4, the won-dollar exchange rate was 1,341.2 won per dollar, and the won-yen rate was 845.17 won per 100 yen. Compared to the end of June, when the rates were 1,549.4 won per dollar and 955 won per 100 yen, the value of the won has significantly increased. Consequently, the amount of won needed to exchange for $5,000 has decreased from approximately 7.74 million won to about 6.7 million won, a reduction of around 1.04 million won. Similarly, the cost for exchanging 100,000 yen has dropped from about 950,000 won to 840,000 won, saving around 110,000 won. This decline in exchange rates has considerably eased the financial burden of international travel.
However, predicting whether exchange rates will fall further or rise again is challenging. Therefore, it is advisable to exchange travel expenses in multiple transactions, starting one to two weeks before departure. This strategy allows travelers to secure part of the necessary funds when rates are low while monitoring the exchange rate trends for the remainder. Utilizing currency alert services to acquire foreign currency when target rates are reached is also a viable option.
Using cash alongside travel cards is practical. Travelers should exchange a certain amount of cash in advance for situations where cash is needed, such as at local markets or small restaurants, while loading the remainder onto a travel card for use.
When using credit cards abroad, it is essential to consider the payment currency. Choosing to pay in won instead of the local currency through Dynamic Currency Conversion (DCC) can incur additional costs of about 3% to 8%, depending on the card issuer and transaction terms. If given the option on the payment screen, selecting the local currency is advisable, and travelers should request their card issuer to block DCC transactions before departing.
Currency exchange services at airports often charge fees exceeding 4%, making it worthwhile to compare mobile exchange benefits offered by banks. According to the Korea Federation of Banks' foreign exchange guide, Shinhan Bank offers up to 90% exchange rate discounts for dollars and yen through its SOL app, while Hana Bank provides a 90% discount for dollars and 80% for yen via Hana OneQ. Woori Bank and NH Nonghyup Bank also offer up to 90% discounts for mobile exchanges, depending on conditions. However, actual discount rates may vary based on the amount exchanged, transaction history, and the channels used, so it is crucial to compare the final amounts in won that travelers will pay.
* This article has been translated by AI.
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