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How To Get The Best Currency Exchange Rates When Transacting With PayPal

Okay, this isn’t related to soap at all–but I hope it will be useful for those of you out there who purchase things online and have to pay using foreign currency.

I learned something new today: when paying for a bill in a foreign currency using Paypal, you can choose between using

  1. Paypal’s currency conversion rate, or
  2. your credit card issuer’s rate.

I called up my bank, and they told me that their credit card follows Visa’s International Exchange Rates, plus a 1% transaction fee. After a quick run on Visa’s site, I found that it was better to select my credit card’s currency conversion rate over Paypal’s. Bear in mind though, that the final rate may differ slightly, because the actual transaction date may be later than the day you got the indicative rate for.

I also discovered that I saved paying an extra 9% of the invoice by opting to transact in my supplier’s home country currency, instead of their USD-based invoice. This was also after comparing rates. (I don’t know if there are instances where the reverse happens, but I would imagine that it could.)

This took me a couple of hours to do (because I was working at home, and my kids are on a short school break), but it saved me several hundred ringgit.

Lesson learned: it’s worthwhile spending time making comparisons – at least for big ticket purchases.

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