Five Top Tips on Getting the Most Out of Travel Money
So you’re going abroad, for work or leisure. You’ve shopped around for the best deal on your flights, accommodation and car hire – all that’s left is to sort out your spending money.
Too often, holidaymakers end up paying over the odds for an airport holiday money service. With a little careful planning and shopping around, you can save a whopping 85 percent on your overseas spending. Here are our tips.
DO – Shop around
Watch out for hidden fees. Zero percent commission is a myth, as opaque suppliers build hidden markups of up to 10 percent away from the real exchange rate. In real money terms, this can cost holidaymakers up to £50 on every £500 you exchange.
Compare on all fees and charges basis, not just who offers gimmicky messages of zero percent commission. Typically, the best rates will be found online.
DO – Forecast your spending
What’s the one thing worse than bringing too much cash with you abroad? Bringing too little. An excess of foreign currency can always be converted back on your return or saved for your next trip. But if you run out of money during your trip, you will be forced to pay high transfer fees every time you use your credit or debit card, or take out cash from an ATM.
Work out how much you are likely to spend on meals, drinks, transport, socialising and tips, then add on another 20 percent just in case.
DO – Keep an eye on the exchange rates two weeks in advance
You will usually know at least a few weeks in advance if you are going to be travelling abroad. Use these few weeks to keep an eye on the currency markets and if you see a positive fluctuation in the exchange rate, go and purchase your foreign currency. To do so, use a reputable mid-market currency conversion tool online.
Remember, no-one has a crystal ball so don’t fret too much if the rate goes in the opposite direction post purchase.
DON’T - Carry too much cash
The most popular cities and tourist spots in the world are also some of the most notorious for pickpockets. Keep the majority of your currency in a safe place (or indeed, a safe) and only carry with you what you expect to spend that day.
Prepaid currency cards are an innovative new way to spend abroad. Essentially, you pre-load foreign currency onto the card and avoid many local ATM fees and point of sale charges. You can only spend what you have on the card and can be quickly cancelled if lost or stolen.
As always, compare side by side the merits of each card. Many will have unique charging structures so it’s best to compare on an all fees and charges basis.
DON’T – Fall for dynamic currency conversion
So, you are at that bistro with clients and the bill comes. The waiter asks, ‘‘Would you prefer to pay in local currency (e.g. Euros) or your home currency (e.g. Pounds).’’ The golden rule is to always opt to pay in local currency, otherwise you will be hit with dynamic currency conversion.
By opting to pay in your own currency, you are essentially giving free reign for the local merchant to set the exchange rate. And boy, they will go to town, applying hidden mark-ups that can be up to five percent of the value of your purchase.
Author Bio: Aviva Tabachnik is Head of Partnerships at MyTravelMoney and MyCurrencyTransfer, the award winning foreign exchange comparison sites. Recently, the company was voted Wired startup of the week.