Nine in 10 Brits will overspend on holiday abroad this year because they’re either confused by the exchange rate or simply oblivious to fluctuations, according to a new poll.
Foreign exchange agent Travel Money Club found travellers will spend more than double their budget, with 1 in 4 expecting to run out of cash by day three, because they’ve no idea what they’re spending in the local currency.
Residents in the capital are the most frivolous, with 75% admitting they regularly overspend on food and alcohol, while splashing out on cliché souvenirs such as slogan t-shirts and sombreros.
Conversely, the Welsh are the canniest with their currency with only 29% failing to stick to their budgets.
The report highlighted how 75% of Brits don’t check exchange rates when buying currency. One in 3 don’t know if it’s better to use cash or credit cards while abroad, while three quarters don’t know what hidden commissions are.
Don Clark, founder of Travel Money Club, said: “Foreign currency is a minefield for holidaymakers if they don’t know what to look out for. Familiarising yourself with the current conversion rates and reading the small print on charges and commissions will prevent unexpected surprises when buying foreign currency.”
If you’re heading abroad, there are some guidelines to follow to make sure you get a fair deal.
First up, shop around. Those who buy at the airport face paying 10% more than the high street – but if you reserve online and pick up later, you could still be quids in.
Secondly, always choose local currency when paying in shops, restaurants and even ATMs. This may feel counterintuitive, but it means you won’t be hit with an (expensive) currency conversion fee.
If this happens to you, and you’re billed in pounds, refuse it. Write ‘DCC rejected’ on the receipt and insist on being charged in local currency.
1. Book your currency online
For the best rates, order your currency online in advance of your trip. This will give you access to not only the best prices, but also the option to lock in a rate – which you can later turn down if the pound improves further.
For example, Travelex allows you to reserve money 30 days in advance and cancel up to 24 hours before you leave – enabling travellers to get the best value for their pound.
When ordering online, check out any delivery or handling fees you may have to pay (often around ÂŁ5) – and factor these into the best deal you’ve found. Also look up any minimum order requirements, if you’re looking to exchange a small sum, an online agent may not be right for you.
Make sure the website you’re buying from is genuine. Look for the padlock sign next to the URL, run a search on the site’s name beforehand and make sure your device is protected. See some tips on how to spot a fake website, here.
2. Avoid the airport
(Image: Jaun Barreto/AFP/Getty)
The priciest decision you can possibly make is to trade your money at the airport.
That’s because airport concessions offer some of the highest rates around – and you could end up flushing half of your holiday savings down the drain.
According to figures, exchange rates at the airport can be more than 10% more expensive than elsewhere, meaning that you could lose ÂŁ100 for every ÂŁ1,000 you exchange.
“Don’t leave changing money to the last minute, you’ll miss out on better rates and end up paying as much as 19% more meaning you could lose ÂŁ150 for every ÂŁ1,000 exchanged,” FairFX chief executive Ian Strafford-Taylor told Mirror Money.
“Airports offer some of the worst exchange rates in the country.”
Left travel money to the last minute? Check which companies have a bureau de change in the airport or ferry terminal you’re travelling from and order online for airport collection. You’ll lock in a far better rate (even just hours before you travel) than if you wait and buy it over the counter.
3. Set up a tracker – and cash in on the spike
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Set up a rate alert with an online currency provider and you’ll get notified when the rates move in your favour. These are available on most major travel money websites – or download an app on your smartphone instead.
Vincent Arcuri at Travelex explains: “When it comes to buying your travel money, getting the best value is all about finding the most purse-friendly exchange rate.
“One way to get the best deal is to use a Travel Rate Tracker. This monitors exchange rates so you don’t have to, and helps you get the most foreign currency for your pounds.
“Remember, it’s important here to look at the total price that a transaction is going to be and not just at the exchange rate, since there can sometimes be additional fees added to your purchase.”
4. Choose more than one payment method
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Don’t hedge your bets, explains Emma Coulthurst at TravelSupermarket, instead, opt for more than one payment method and you won’t lose out.
“Carry a market-leading credit or debit card for use overseas, a prepaid card and also some cash.”
“Make sure you get credit and debit cards that are specifically designed for overseas usage with minimal (if any) charges,” she adds.
“But, be careful. Many credit and debit cards carry a 2.99% transaction fee with some having additional one-off fees for purchases. That’s an extra ÂŁ2.99 to pay for every ÂŁ100 you spend.
“Debit cards also tend to include a hidden currency loading fee which can add as much as 3% to the cost – so watch out.”
Metrobank, Norwich & Peterborough and Nationwide all offer accounts with debit cards that don’t charge for use in some countries.
Halifax, Saga and Nationwide are also amongst a handful of providers who offer credit cards with no fees for spending abroad.
We’ve explored some of your plastic options abroad below.
5. Invest in a prepaid travel card
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Using a prepaid card means that you can top-up and lock-in a deal when the rate is highest.
To activate, all you need to do is sign up, load it up with money and then use it just you would any debit or credit card abroad (wherever you see a Mastercard or Visa symbol). No credit check is necessary – but you must be at least 18 to apply.
One of the key advantages of prepaid cards is that if it goes missing or gets stolen abroad, your cash is safe – and you can get it blocked in minutes (the faster you act the better on contactless ones).
The downside is that it offers no financial security (like say Section 75 on your credit card). It can be used almost anywhere, but not at petrol stations or to hire a car, in most cases, you’ll also have to pay ATM withdrawal fees.
Prepaid card pros
âś“ Spend only what you top up, and no overdraft means you won’t go into the red.
âś“ Top up as and when, usually on your smartphone on-the-go.
âś“ Pre-top up means you can lock in a good rate and spend the cash later.
âś“ No credit checks necessary – ideal for those with a poor score.
âś“ No transaction fees
Prepaid card cons
âś— Prepaid cards have a limited shelf-life, usually of two or three years – watch out for fees after this period.
âś— Locking in a rate means you may lose out on a lower one at a later date.
âś— Usually charge ATM fees and some will add on top-up fees, too.
5 best Europe prepaid cards
(Image: Matt Cardy)
FairFX Euro Currency Card Special: No transaction fees, no monthly fees, no card fee (on top ups above £50). An ATM withdraw fee of €1.50 does apply. Check exchange rates here. Join through MoneySuperMarket and get £25 when you load £500.
Warning: There is a fee of 1.75% when card is used out of the Eurozone.WeSwap Prepaid MasterCard: No transaction fees, no monthly fees, no card fee. An ATM withdraw fee of €1.75 does apply. Check exchange rates here. Join through MoneySuperMarket and get £25 when you load £500.
Warning: After first 0% fee seven day swap, commission of up to 2% charged.Caxton Prepaid Euro Currency Card: No transaction fees, no monthly fees, no card fee. A UK ATM withdraw fee of ÂŁ1.50 does apply, however free abroad. Check exchange rates here. Join through MoneySuperMarket and get ÂŁ20 cashback on loads above ÂŁ500.
Warning: Avoid using your card for security deposits, automated petrol stations, car rentals and hotel deposits.Travelex Money Card: No transaction fees, no monthly fees and no card fee. A UK ATM withdraw fee of ÂŁ1.50 does apply, however free abroad. Check exchange rates here.
Warning: There is a monthly inactivity fee of ÂŁ2 per month, should the card become dormant for 12 months.easyJet Euro Currency Card by easyJet: No transaction fees, no monthly fees, no card fee and no ATM fees apply. Check exchange rates here.
Warning: There is a fee of 3.5% when card is used out of the Eurozone.
5 best Dollar prepaid cards
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FairFX Euro Currency Card Special: No transaction fees, no monthly fees, no card fee (on top ups above ÂŁ50). An ATM withdraw fee of $2 does apply. Check exchange rates here. Join through MoneySuperMarket and get ÂŁ25 when you load ÂŁ500.
Warning: There is a fee of 1.75% when card is used outside of the USA.WeSwap Prepaid MasterCard: No transaction fees, no monthly fees, no card fee. An ATM withdraw fee of $2.25 does apply. Check exchange rates here. Join through MoneySuperMarket and get ÂŁ25 when you load ÂŁ500.
Warning: After first 0% fee seven day swap, commission of up to 2% charged.Caxton Prepaid Euro Currency Card: No transaction fees, no monthly fees, no card fee. A UK ATM withdraw fee of ÂŁ1.50 does apply, however free abroad. Check exchange rates here. Join through MoneySuperMarket and get ÂŁ20 cashback on loads above ÂŁ500.
Warning: Avoid using your card for security deposits, automated petrol stations, car rentals and hotel deposits.Travelex Money Card: No transaction fees, no monthly fees and no card fee. A UK ATM withdraw fee of ÂŁ1.50 does apply, however free abroad. Check exchange rates here.
Warning: There is a monthly inactivity fee of ÂŁ2 per month, should the card become dormant for 12 months.Moneycorp Explorer Multi-Currency MasterCard: No transaction fees, no monthly fees, no card fee but a $2.30 ATM fee does apply. Check exchange rates here.
Warning: ÂŁ3 per month fee if not used for 12 consecutive months.
5. Travel credit cards – the best ones
Everyday debit and credit cards are seen as convenient, but when you use them overseas there’s a risk of being stung by a host of charges and hidden fees without even realising.
That’s why you have to be very clever when choosing the right one – with some changing as much as 5% just to withdraw cash at an ATM.
Editor of Money.co.uk, Hannah Maundrell explains: “It is possible to get non-sterling transaction fee-free debit cards, however you’ll need to move bank accounts, which is why getting a credit card and using it right would be your better option.”
When picking the right credit card, make sure you have provisions in place to make sure you don’t miss any payments – aim to pay it off in full as soon as possible so you’re not charged interest.
“Also remember to check your chances of being accepted before you apply so you can see which you’re most likely to get – this will avoid any flags on your credit report.
“If you’re travelling outside of major cities then it can be better to go for Visa or MasterCard over an American Express.”
Money.co.uk’s best credit cards with free overseas spending
Source Link:- https://www.mirror.co.uk/money/how-to-buy-travel-money-10755543
