Poor Exchange Rates and High Fees Cost Britons £640m on Holidays in Europe Last Year
New research by credit experts TotallyMoney reveals Brits lost £640m on their holidays in Europe last year due to high transaction fees and poor exchange rates. The annual Financial Awareness Survey 2019 commissioned by TotallyMoney and carried out by OnePoll asked 2,000 UK adults about their spending habits before and during a holiday abroad.
- £437m was lost on holidays in Europe in the past year due to poor exchange rates and fees when spending cash
- A further £95 million was lost through using debit cards abroad, and over £7 million using pre-paid cards
- Brits using their primary credit card as opposed to a travel credit card paid out over £100 million extra on fees and exchange rates
- Only a small number of people (8%) use travel credit cards while abroad
- Over £80 million could have been saved in the past year by avoiding expensive exchange rates at the airport
- More than half (58%) don't know you can avoid high fees by paying in the local currency
The survey highlighted over half of people (51%) use cash abroad. If everyone changed their exchanging habits, nearly €500m more could have been spent in Europe last year. Brits using their debit, credit and pre-paid cards while holidaying in Europe last year paid an extra £103 million in fees and poor exchange rates. For a lot of people, exchanging currency is based on convenience, rather than value. But, this decision is wasting millions of pounds. Another error is exchanging cash at the airport. Changing money before arriving at the airport could save over £80 million. This works out as a staggering £55.25 per person.
TotallyMoney CEO, Alastair Douglas, believes planning could be the key to saving money on holiday. He said: “Summer holidays are a highlight for so many families, and lots of planning goes into creating the perfect trip. Unfortunately, lack of financial planning means people are losing money. “Poor exchange rates at the airport and using the wrong card abroad mean people end up spending more money than they need to. Understanding the fees involved can help people have a bit more spending money in their pocket.
Douglas explains that using a travel credit card could be the best solution: “Cards with no overseas transaction fees are perfect. It also means you don’t have to carry loads of cash around with you_._ The TotallyMoney credit card eligibility checker can help you to find cards you’re likely to be accepted for before your holiday.” Here are five tips to make your money go further on your holiday this summer.
Get a travel credit card
The TotallyMoney Financial Awareness Survey 2019 found that just over a third of people (37%) are aware you don't have to spend on your credit cards every month. This means a travel credit card can be saved for each holiday. Keep it with your passport and it’s ready every time you travel. The best travel credit cards charge no transaction fees while abroad. But, even with a poor credit history, you may be eligible for cards with a low overseas transaction fee. This will be cheaper than using your debit card while away. TotallyMoney’s free eligibility checker lets you see what cards you are likely to be accepted for before you apply.
Find the best currency exchange rate at a specialist travel bureau
Airports are known for their lousy exchange rates. They know it’s the last chance for people to change money before jetting off. This Summer, visit a specialist travel bureau to change your cash. These places often offer the best rate on the market and can make your cash go further while away.
Always pay in the local currency — you will receive the best rate
Dynamic Currency Conversion (DCC) — being able to withdraw or pay using your own currency abroad — gives a poor exchange rate. Yet, over half of people (58%) are unaware of this and opt for the familiarity of Stirling. Unsuspecting tourists may find lenders and retailers favour this type of transaction as they get more money. Alarmingly, 16% of those surveyed opted to pay in Pounds, while 17% claim they never had the option of choosing the local currency. When given the choice of currency by retailers and restaurants, always choose local currency.
Check how much your bank or lender charges for transactions abroad
Many of the fees charged on credit and debit cards abroad are extremely high. Despite this, over one in ten (13%) use their primary credit card for most of their payments on holiday. Before jetting off, check with your lender how much it will charge for overseas transactions. If the fee is high, it’s worth finding an alternative option — such as a travel credit card.
Check how much your bank or lender charges for withdrawal fees abroad
Not to be confused with transaction fees, withdrawal fees occur when using a credit card at an ATM. This charge will occur both in the UK and abroad. But, certain cards may charge ATM withdrawal fees, plus fees for withdrawing abroad — meaning you pay even more for withdrawing cash overseas. If you like paying in cash while on holiday, make sure to bring enough to spend and exchange it at a competitive price before arriving at the airport. Research on credit and debit card fees by Moneycomms 04.06.2019
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TotallyMoney believes people’s financial data should work for them, and not against them and with more than four million customers, they provide the UK’s only free, live credit score and report.
Its service helps customers understand their financial position and provides personalised recommendations so they can start creating financial momentum. TotallyMoney also works closely with leading lenders, to ensure eligible customers are matched with the right products, underpinned by its robust data, product and tech capabilities.
TotallyMoney is regulated by the Financial Conduct Authority (FCA).