Buying travel dollars is a must for those planning a trip abroad. There are several currency exchange centers, banks, and even online platforms that allow you to buy and sell this currency. However, before making the exchange, it is important to know the most cost-effective ways to carry out this transaction, as well as the taxes and fees that will be charged.
Follow this article to learn what the tourist dollar is and how it differs from the business dollar. Also check out step-by-step instructions for buying a coin, the cost of a coin, and tips for cheapening the exchange.
What is the tourist dollar?
What are the benefits of buying Travel Dollars?
- It is considered the world's reserve currency, which influences the economy of many countries
- dollar value stability
- Settlement benchmark as the world's largest and most popular currency in international trade
- This is an option for creditors in times of crisis because the Fed (Federal Reserve) grants credit through the central banks of the United States through a swap line
Difference Between Business Dollar and Tourism Dollar
The main difference between a business dollar and a travel dollar is related to the purpose assigned to each: the former can be bought and traded only by banks and financial institutions, while the latter is used by individuals.
In addition, there is a significant difference in the value of the contributions. Because it is a currency used to move large amounts of money, the commercial dollar has a lower buying and selling price than tourism.
Why is the tourist dollar more expensive?
How to buy a tourist dollar?
That's why we've put together this simplified guide to help you buy Travel Dollars.
1. Search
2. Evaluate purchase options
Tourist dollars can be bought at bank offices, brokerage houses, exchange houses, financial institutions and even at the airport. However, getting money without planning in advance is not the best option because it can make the purchase even more expensive.
3. Choose a representative authorized by the central bank
If you want to choose the ideal place, be it a bank, an exchange house or a travel agency, check the prices and if it is authorized by the Central Bank of Brazil. To do this, it is enough to familiarize yourself with the list of authorized representatives of BC.
4. Check the payment according to the exchange rate
The Tax on Financial Transactions (IOF) is the most important currency transaction tax. However, since buying currency with cash, prepaid and credit card is different, you should consider the following values before buying tourist dollars:
- Non-cash payments: IOF 1.1% of the total value of the currency purchased
- Prepaid card: IOF 6.38% of the value of the card charge
- Credit card: IOF 6.38% of the value of each purchase
Possible ways to use currency abroad
There are three common ways to use foreign currency. But each one of them has different policies and values, which vary according to the form of operation and the corresponding costs. Here are some of them:
- Non-monetary: If you buy non-monetary tourist dollars, you will have to pay an IOF tax of 1.1% on the total value of the currency purchased;
- Prepaid Card: When adding a prepaid card that functions as a debit, you will be charged an IOF fee of 6.38% of the debit amount. Membership and withdrawal fees or surcharges may also apply, which vary from operator to operator;
- Credit Card: Credit card is the least preferred method because the IOF rate is 6.38% of the dollar value of the purchase, which is very high compared to other methods. If the purchase is made in another currency, it will be converted to dollars for the IOF application.
In 2020, the central bank changed the rules for the loan offer used when buying with a credit card abroad. According to the agency, the values must be calculated based on the exchange rate in force on the day of purchase.
This makes it easier for credit card customers to travel abroad because they know in advance how much they will have to pay for the financial transaction.
The best way to receive or transfer money abroad
Once you have decided how you want to buy travel dollars, you can use platforms specialized in receiving and transferring money abroad to make your financial operations more practical, easy and economical.
There are some platforms where you can receive or transfer completely online and sometimes these prices are much cheaper than the prices of purchases made with international credit cards. In addition to offering that the transfers made by the platform arrive in just 1 business day.
Conclusion: Is it worth investing in dollars?
Yes, it is worth investing dollars. However, it is important that you understand the forex market and know how to recognize the right time to buy currencies.
It's also important to note that it's worth buying a dollar if you can afford it. For these purposes, the acquisition of foreign currency must be treated as an investment with variable income.
