Home , News , What is Money? , Banking , Choosing a bank , Opening an account , Current Accounts , Online Banking , Telephone Banking , Savings Accounts , I.S.A , Mortgages , Pensions , Insurance , Travel Services , What is Interest? , Overdrafts , Credit Cards , The Euro , How to complain Benefits , Budget , CONTACT US! ,
Travel Services
Foreign currency
Foreign currency is the term used to describe the type of money used by a country other than ours. The currency that we have in the United Kingdom is the Great British Pound (or pound sterling). Other countries around the world have a different kind of currency.
The United States of America uses the dollar, the Japanese use the Yen, the Swiss use francs, and the Mexicans use the Peso. So, the dollar, the yen, the franc and the peso are all examples of foreign currency.
So what happens then if you were going on holiday to a foreign country? Can you use the pound as money in another country?
In order to buy things when we travel abroad, we are able to buy the currency used by the country we are visiting from our local bureau de change. This will then mean that we have the right money as soon as we land in another country.
The bureau de change is the name given to the section of a bank, or other organisation, which will trade in foreign currency. Most travel agents and post offices will also have a bureau de change.
When buying foreign currency, you will need to exchange pounds sterling for the currency from the country you need. If you were looking to change £100.00 into United States dollars, you probably wouldn’t receive 100 dollars. This is because the value of the dollar is different to the value of the pound.
This difference in value is known as the exchange rate. The exchange rate will change on a daily basis, and shows the difference in value between the British pound the foreign currency in question.
The bureau de change will also buy back any unused foreign currency in exchange for pounds sterling, and there is a different exchange rate used for buying foreign currency, and selling foreign currency.
You may also be expected to pay a small fee for the service. This fee may be referred to as commission, and is charged to cover the costs of running the service. Most organisations, however, will offer a commission free service for long-term customers. So if you need to buy or sell your foreign currency, shop around and get the best deal that you can.
The bureau de change will also sell travellers cheques (cheques which can be used abroad for shopping) and international money orders (a form of sending money overseas by post).
Disclaimer, Target Audience, Jurisdiction Last updated & checked: 30/03/2006