What is the most cost-effective checkout method for year-end outbound shopping?

This year, against the backdrop of a strong RMB, the U.S. dollar has been falling frequently, the Hong Kong dollar is "soft" in comparison, and various other currencies have also experienced considerable changes. Now is a good time to go shopping abroad at the end of the year. People need to know more about exchange rates before traveling to avoid suffering losses when shopping abroad.

Choose the correct currency for cash purchases

Many domestic citizens do not consider the currency used at the destination when leaving the country, but instead convert all foreign exchange limits into US dollars. "In fact, this approach is very irrational."

Citizens can now exchange for corresponding foreign currencies before traveling abroad. The main currencies available are US dollars, euros or Hong Kong dollars. Whether to exchange U.S. dollars for travel or convert into the currency of the place of travel is mainly determined based on the trend of the foreign exchange market. This avoids losses caused by exchange rate conversions. To give a very simple example, the central parity rate of the euro against the U.S. dollar in 2000 was 0.823. If you held 1,000 U.S. dollars in Europe at that time, it was actually equivalent to having 1,215.07 euros in your hand. But now the situation is different. The U.S. dollar has weakened significantly, and the highest price of the euro against the U.S. dollar once reached 1.35. Therefore, now citizens holding 1,000 U.S. dollars when traveling to the euro zone can only spend more than 740 euros.

Swipe cards to avoid exchanges between multiple currencies

Nowadays, many people prefer to swipe cards when traveling abroad. However, few people understand the details of exchange rate conversion when credit cards are used overseas. In fact, most of the popular dual-currency cards or foreign currency credit cards are settled in US dollars. For example, when cardholders make purchases in Hong Kong, the amount deducted by swiping the card is calculated in the local currency, that is, Hong Kong dollars. After the cardholder returns to China, he will need to repay the amount in RMB. This process of entry and exit requires two exchanges between currencies:

——When swiping the card using "international routes" such as VISA, the consumption will be based on the US dollar to Hong Kong dollar exchange rate in the inter-bank market. After conversion, a currency conversion fee of 1.5% of the purchase amount will be charged. For example, on November 1, the exchange rate of US dollars against Hong Kong dollars in the inter-bank market was 7.76, and the cardholder spent HK$5,000, which is US$653.99. If the cardholder returns to China on November 22, he will need to use RMB to purchase US dollars to repay the loan. Calculated based on the bank's exchange rate of USD to RMB on that day of 7.8802, the cardholder needs to pay RMB 5,153.57.

Is there any way to save money by using credit cards? In fact, in travel destinations such as South Korea, Thailand, Hong Kong, and Macao where UnionPay cards are accepted, using UnionPay cards for consumption means using the UnionPay network. There is only one currency exchange process in the process. The exchange rate conversion is the most accurate, so it is also the most economical. money. For example, based on the selling price of Hong Kong dollars against RMB 1.0122 listed by the card issuer on November 1, HK$5,000 is equivalent to RMB 5,061, which is RMB 92.57 less than the previous method.

It is most cost-effective to use a Hong Kong dollar card when shopping in Hong Kong

Although foreign currency cash transactions can avoid the exchange rate risk of paying for goods after returning to the mainland, for tourists traveling abroad, it is necessary to carry a large amount of cash with them. It's really not safe. Seasoned "shopping" customers mostly choose to pay with credit cards when shopping overseas. Especially for year-end shopping in Hong Kong, it is very cost-effective to use a Hong Kong dollar credit card, and the later the repayment date is, the more cost-effective it is.

Let’s calculate it: the cardholder spent HKD 5,000 on cosmetics in Hong Kong on November 1st, using a credit card settled in Hong Kong dollars. After returning to the Mainland, I used RMB to purchase Hong Kong dollars for repayment on November 22. Calculated based on the selling price of Hong Kong dollars against RMB 1.012 on the day of repayment, I need to pay RMB 5,060. If the card was swiped with UnionPay at that time, based on the selling price of 1.0122 for Hong Kong dollars against RMB on the day the card was swiped on November 1, one would need to pay 5,061 yuan, which is 1 yuan more than the previous method. From actual calculations, we can draw this conclusion: as long as the listed selling price in Hong Kong dollars on the repayment day is lower than the day of consumption, it will be more cost-effective for cardholders to use Hong Kong dollar cards in Hong Kong than UnionPay cards. Therefore, under the expectation that the RMB will continue to appreciate, the later the repayment date is, the more cost-effective it is.

At present, people have a wide range of tools for outbound shopping, including foreign currency cash, traveler's checks, bank cards, etc. But when going to different destinations, the choice of travel tools is very important.

Currently, credit cards are available from almost all banks, mainly US dollar dual-currency cards, but also Hong Kong dollar and Euro bank cards. Depending on where you are traveling, you can choose one-card dual-currency bank cards in different currencies. Cards can be swiped in shopping malls and supermarkets in most European cities. It is most convenient and cost-effective for citizens to bring a Euro dual-currency card.