Chapter 13 Flashcard

Chapter 13

The Best Currency Exchange Methods for Every Situation

The Best Currency Exchange Methods for Every Situation SAT / ACT Prep Online Guides and Tips If you’re planning a trip to another country, you’ve probably spent a lot of time thinking about the airline you’ll fly, the hotel or AirBnB you’ll stay in, the food you’ll eat, and the fun new things you’ll get to experience. You might not, on the other hand, have thought too much about how you’ll get money on your trip. Despite the fact that currency conversion is a decidedly less interesting travel topic than the best place to go zip-lining, it’s important to understand the costs associated with changing money. Currency exchange requires some time and effort, so it’s necessary to plan ahead or you risk getting stuck with heavy fees. In this article, I’ll cover the basics of how currency exchange works and what you should consider when deciding where and how to change money. How Currency Conversion Works If you’re traveling, sending money to another country, or buying, selling, or trading foreign currency, you’ll need to change your money from one currency to another in a transaction called a currency exchange. Currency exchange tells you what one country’s money is worth in terms of another country’s money. All currencies have different values, which change daily based on different factors like inflation, economic stability, and interest rates. When you exchange currency, you’re trading in a certain amount of money in one currency for the equivalent amount of money in another currency. Currency exchange rates aren’t fixed. Rather, they’re constantly changing. The rate at which you exchange two currencies one day may be different than the rate at which you exchange the same two currencies the next day. Because currency exchange rates change so often, it’s important to understand the best ways to buy, sell, and trade currencies so you get the best deal. Factors to Consider for Currency Exchange There are a lot of fees associated with currency conversion. Read on to learn the three factors that affect currency exchange fees so you can make sure you’re getting the best deal. #1: Explicit Fees Most methods that you’ll use to exchange money will come with a set, explicit fee. You can think about this fee as the cost of doing the business of currency exchange. For instance, you may have to pay a $30 fee to wire money from your bank to a foreign bank. Or, you may be charged a 1% fee to convert your currency at an airport currency exchange teller. Consider these fees when deciding where to exchange your money. A 1% fee may sound more attractive than a flat dollar amount, but could add up to more if you’re exchanging large amounts of money. #2: Conversion Rate Conversion rates almost always differ from the wholesale currency exchange rate. So, for instance, if the wholesale market is charging $1.10 USD per one euro, a bank or currency exchange company like Travelex may charge $1.105 or $1.110 USD per one euro. Again, while this deviation in conversion rate may seem small, it adds up, particularly if you’re exchanging a large amount of money. #3: Convenience The idea of convenience is more nebulous than conversion rates or explicit fees. Convenience is basically the value of your time and effort to exchange money. For instance, if your current bank charges $1.110 USD per one euro, and a different bank charges $1.105 per one euro, it’s probably not worth it to go to the different bank just to save $0.005. Similarly, you need to consider how accessible currency exchange is where you live. If your local bank will exchange currency, that's a solid option. However, if you need to travel three hours out of your way to find a bank that'll change your money, you may just want to wait to change money at the airport. You’ll want to weigh the value of comfort, ease, and convenience versus actual monetary savings. Best Currency Conversion Options In this section, I’ll detail the top currency exchange options for a number of different situations. Best Foreign Exchange Options While Traveling If you’re traveling, you’ll want to make sure changing currency is cheap and convenient. The best option is to withdraw cash as you go on your trip from ATMs. In this section, I’ll describe the most common currency exchange options for travelers. ATMs The most cost efficient way to exchange money in a foreign country is to withdraw money from an ATM. If you have a commonly accepted ATM card, like a Visa or Mastercard, you can likely withdraw money from a foreign ATM while traveling. ATMs are highly prevalent throughout the world and any country that receives even a small number of foreign tourists will have ATMs at least in the airport that you can withdraw cash from. However, there are some downsides to withdrawing from a foreign ATM. First, you can be slapped with fees if you withdraw from a foreign ATM. In addition to a small flat fee for using the ATM in the first place, you’ll likely have a foreign transaction fee that adds between 1-5% to the total amount of your withdrawal. Consider opening an account at a bank like Charles Schwab, for instance, that doesn't charge international transaction fees. Second, it can be difficult to find ATMs that accept U.S. debit cards in some places. While the vast majority of countries with tourists have numerous options for withdrawing cash, some rural or less well-traveled areas may not have cash readily available. You may want to bring some with you, just in case, or withdraw a larger amount when you do visit an ATM so you don't get stuck. Airport Kiosks Airport kiosks are convenient, ubiquitous, and, often, a huge ripoff. Airport kiosks often offer poor exchange rates and high fees for exchanging cash. However, you can use them as a last resort if you need cash on hand when you enter a country. Normally, you can either bring cash to exchange or withdraw cash from your ATM debit or credit card. If you have your ATM card with you, I'd recommend visiting an ATM rather than withdrawing from an airport kiosk. Credit Cards Credit cards are a solid option for paying for things you buy abroad without cash. There are tons of travel credit cards out there that don't charge international transaction fees, so if you can get one of those, I'd recommend using your credit card as much as possible. You can also commonly withdraw cash as a cash advance from your credit card. However, most credit cards charge cash advance fees and higher interest rates on cash withdrawals. If you decide to use your credit card abroad, I'd stick to using it on credit card transactions and withdraw money with your debit card instead. Cash Conversion Banks and credit unions often offer the most favorable conversion rates and limited to no fees if you exchange with a teller. Banks and credit unions, however, often exchange only widely used and popular currencies, such as the peso or the euro. If you’re looking for a less common currency, you might not be able to conduct a currency exchange at your bank. Before going to your bank, be sure to look up their currency exchange policies online or speak to a representative over the phone. You want to confirm that your branch a) actually offers currency conversion services, and b) carries the currency you need. Best Foreign Exchange Options for Sending Money to a Foreign Country Sending money to a foreign country can be expensive, with lots of hidden fees. In general, your best options are wire or online transfers, which often have flat fees. You can also use PayPal or Western Union if you have to, which charge a percentage fee. Wire/Online Transfers Wire transfers, which you can make in person or over the phone at a bank, or online transfers, which you can make using your online banking account, are the best options for sending money abroad. Most banks and credit unions only charge a small flat fee for wire transfers (typically between $15 - $30), so if you’re moving a large amount of money, you’ll save on fees by transferring directly from your bank. Wire and online transfers also allow you to transfer more money at one time than using a third party service like PayPal or Western Union. If you’re sending money to a foreign bank, you’ll need information from the recipient, including the name and address of their financial institution, as well as a SWIFT or IBAN number. PayPal PayPal is a solid option for transferring money to foreign accounts, but does come with more fees than most wire or online transfers. For transactions under $3,000, you’ll pay a 2.9% fee, plus a $0.30 per transaction charge. Larger transfers incur less of a fee, but are more restricted. If you want to make a larger transaction, you’ll have to go through additional identity verification steps. Western Union Western Union charges a flat rate for transferring money to another account. Their fees are typically higher than those at most banks and credit unions. You’ll also be charged an exchange rate on transfers made on international funds. Unfortunately, most Western Union foreign transactions don’t receive a favorable exchange rate. Best Foreign Exchange Options for Currency Trading Currency trading is a complicated, fast-paced business. If you’re looking for a forex broker, consider one of the following options. Oanda Oanda is a strong trading platform that offers a large selection of currency pairs (90+). Oanda is friendly to newer traders, as it has a $0 account minimum and no requirements for minimum trade lot. Oanda also had the lowest spread markup on commissions across the seven major currency pairs. Ameritrade TD Ameritrade is the leader in currency exchange, with an unmatched selection of currency pairs and lots of tools for investors. Trades will be subject to commissions, however, and TD Ameritrade has an account minimum of $2,000. Best Options for Buying and Selling Foreign Cash in the US Back from your trip with lots of foreign cash still in hand? Consider these methods for buying and selling foreign currency in the United States. Your Bank Banks will likely offer you the best deal on buying back currency, but may not buy back all types of currency. Airport Kiosks If your bank won’t buy back your money, airport kiosks will buy almost all types of currency. But, you probably won’t get a great exchange rate, but at least you won’t be stuck with cash you can’t use! Current Currency Exchange Rates Check out the chart below for current currency exchange rates, as well as the current currency exchange rate at Travelex. Note, rates are constantly changing. I included these so you could see how the Travelex rate differs from the stated daily exchange rate. Currency Exchange Rate ($1 USD =) Travelex Rate Canadian Dollar 1.3274 1.1757 Mexican Peso 18.00027 15.9987 European Euro 0.8934 0.8146 British Pound 0.7814 0.7141 Chinese Yuan 6.84 6.0283 Japanese Yen 111.28 98.9324 Australian Dollar 1.32 1.1639 Russian Ruble 59.45 49.9108 Swiss Franc 0.9693 0.8741 South African Rand 12.91 11.1990 In Summary Changing money can be a complicated, but necessary process. If you’re exchanging your currency, you’ve got a number of different options, depending on how much money you need and which currency you’re exchanging. Be sure to do your research or risk getting saddled with unexpected and hefty extra fees.

Religious-Discrimination Claims on the Rise Article

Religious-Discrimination Claims on the Rise - Article Example Managers are torn between respecting strict religious doctrines observed by employees and balancing between codes of dressings as envisaged in the firm’s organizational culture. The continued intermixing of work and faith creates a complex scenario for managers. The situation is worse when employees are expected to perform their duties that contradict with their faiths. For instance, transportation companies are finding it difficult to have Muslim and some Christians drivers transport alcohol and other products that contradict their faith. One of the factors that have been said to lead to employees’ increased advocacy for their rights is increased immigrants in the country. As people sharing a similar faith increase, they gain power and courage to sanction managers to respect their religious rights in organizations. This explains the doubling of religious discrimination cases in the last 15 years, as reported by the Equal Employment Opportunity Commission. However, cons idering that most religious discrimination cases are brought by immigrants, the reported cases are way below other discriminations based on age and sex. The low figures may also be explained from the view that most people are afraid of negative publicity and losing their jobs. Employees in such a case will carry out their duties to maintain their careers. On the same, note most reported cases involve the code of dressing and objection to carrying out duties that contradict with one’s faith of allegiance, compared to a case that involve refusal to observe worship days. This is because organizations do try to observe days of worship for different employees, though the code of dressing affects the company’s looks to its clients, and refusals to carry out allocated duties may imply absconding from duties. For instance, a Muslim faithful expected to transport alcohol from one point to the other is deemed by the company to have absconded from duty if he/she refuses to comply with such orders. This is the reason behind increased cases of religious discrimination reported to the EEOC. Federal court rulings have increased managers’ dilemmas as they have interpreted the law against discrimination in favor of the complainant, requiring companies to pay fines for not respecting people‘s beliefs. For instance, Abercrombie was required to pay a $71000 fine for refusing to hire two women wearing a hijab. To the company, such hijab were against their culture but to the federal courts, the company discriminated against the two women. This has added to the precarious situation that most managers face today. However, though EECO has tried to minimize such cases by talking to companies about the right to observe religious beliefs, companies have found a loophole to win these cases. Abercrombie got a reprieve from the Federal Appeals Court, which observed that the complainants had not indicated in writing that the head scarfs were of religious significan ce. Therefore, the company had not discriminated against the two. Therefore, the main requirement for such employees to get the right to exercise their religion is to request for accommodation, which the company would consider granting or not based on written submissions. Though the Civil Right Act of 1964 requires that employees accommodate employees from different faiths unless such accommodation may lead to hardships, the act is vague in the description of hardships. Consequently, it is upon the company to advance enough