When you are planning your European trip of a lifetime, the last thing you want to worry about is getting a bad deal on your currency exchange or being blatantly ripped off by a less than honest currency company. You just want to plan where you are going to walk, sunbath, jet ski and eat!
Whether you are traveling to Italy or Croatia for business or for pleasure, it pays to be a savvy consumer when shopping for currency deals and making your money work for you abroad.
Armed with some truths about the currency exchange process, how best to change your money and what to avoid, you’ll have more money in your pocket, total peace of mind and a smug expression every time you get your wallet out.
1. 0% Commission? Are You Sure It’s Really Free?
It sounds like such a great deal – 0% commission when you make a currency exchange. But when you stop to really think about these statements made by currency exchange companies, you might start to smell a rat. How are these companies making any money themselves if they are not charging you for changing up your money? How are they supporting their rent payments, paying their staff or running their slick marketing campaigns?
2. Exchange Rate Alone Will Always Distinguish Between a Good and Bad Currency Deal
Well, the answer lies in the exchange rate you are offered. These companies will buy foreign currency at one rate and then offer you a lower rate. They then cream the difference off of the top and make a nice profit. So in effect your currency exchange is not free after all. That’s why it pays to shop around for the best rate as this is the only figure you should be concerned with. Get a good rate and 0% fees for your currency exchange and you’re onto a winner.
3. Avoid The Foreign Exchange Desk At The Airport Or Hotel
Thinking of getting your currency exchange at the airport or when you reach your destination hotel? Of course, these methods are very convenient and quick, but are they going to give you a good deal? The problem with an airport currency exchange is that they know they have a captive audience. With so many travelers using their services and needing currency exchange services before they travel, these companies can afford to offer a lower rate than you might get elsewhere. If you can, avoid changing your money up at the airport at all costs unless you need emergency cash. Buying euros online typically works out overall cheapest. A recent mystery shop from independent comparison site MyTravelMoney shows you can save up to 10% versus the airport bureau.
4. Beware Of Steep Debit And Credit Card Charges And Dynamic Currency Conversion
If you are planning on using your credit or debit card abroad, the charges for withdrawing cash and spending overseas can be quite hefty. Costs will vary and will depend on what you are using your card for and the type of card you are using. Check out which are the best credit or debit cards to use abroad and always choose to pay in the local currency if you are asked at point of payment. Some restaurants and other establishments for example may ask if you want to pay in Sterling. On face value, this can sound like a better way to pay, but you may be stung by higher conversion rates if you do. This is known as dynamic currency conversion and is best avoided.
5. Prepaid Cards Can Be Great But Be Careful Of Hidden Charges
Prepaid cards can be a really handy way to carry your holiday money around with you. The best bit is that you can choose to only top them up with small amounts of cash as you need it – if your card is lost or stolen you won’t have the hassle of canceling credit cards or debit cards whilst abroad. However, you will need to choose a card that does not charge you multiple fees just for using it. Check whether you will be charged for topping up your card or leaving a balance on the card – some companies charge a monthly fee on any balance remaining.
The secret to getting the most from your money when traveling abroad is to shop around for the best currency deals, understand that 0% commission isn’t as clear cut as it appears and that the high street or airport are not the best places to exchange your hard earned cash.
Have any tips on not getting ripped off on currency exchange? Let share your tips!
Aviva Tabachnik is the resident currency expert & avid blogger at UK headquartered comparison website MyTravelMoney. Aviva was born and raised in San Francisco, and has recently relocated to Tel Aviv. The OPP award winning site provides live travel money rates and unbiased information on holiday money deals.