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Money Saving Tips for Travelling

6 June 2018 No Comment

For many people, a trip abroad is a treat that only comes once a year. This is why when we do we want to make sure that we are getting the best value for money possible.

Currency Conversion

When travelling, it is always good to have a little cash on hand. The thing about money is that it is also the prime target for thieves and pickpockets so you need to make sure that you are keeping it safe and getting some insurance does not hurt either.

The conversion rate is the most important thing for acquiring foreign currency. A company will always offer worse than a perfect conversion rate and keep the difference as a fee. Alternatively, they may offer close to the “real” exchange rate but will take some kind of commission.

If you can find a company with no commission and a competitive exchange rate then that is ideal. However, this is unlikely so the best you can do is to run some basic calculations and see who is giving you the best offer. Also, beware of hidden charges such as “handling fees” or “minimum charges”. Sites like –°omparecurrency.com make this process much simpler. Click here to find live realtime exchange rates from providers like Tesco, Thomas Cook and Post offices.

Traveller’s Cheques

These are not as common as they once were but they are still a viable option. However, these should definitely not be your primary source of money when abroad.

The great thing is that if they happen to be lost or stolen you can easily get your money back. The only issue is that they cost a lot compared to the other options due to commission fees and conversion fees. The conversion fees are always the same so if you are using them it is best to favour larger sums.

Credit Cards

A credit card can be great or terrible. This depends entirely on the fees the company imposes and it’s worth remembering that a card may be good at home but terrible abroad.

Often the fees will be somewhere in the region of 2.75% to 2.99% of the whatever is spent and most will impose an additional fee if they are used to withdraw cash. Even if there is no withdrawal fee it is more than likely that you will have to pay interest immediately even if you plan to pay off the balance by the turn of the month.

The good news is that there are credit cards that are made explicitly for use overseas. They will either have no conversion fees or they will at least be substantially lower than the alternative.

In general, a credit card can offer decent rates and it is safer than cash. If cash is stolen, then it is very unlikely that you will see any of it again. In the event that your card is stolen, all you need to do is call the issuer and have it cancelled. This may be inconvenient but that is better than actually losing the money.

It may also be worth checking to see what kind of rates your debit card has as there are a few that can be used overseas for only a small fee. Most of the banks have pages like this on their website which are worth reading.

Prepaid Cards

A prepaid card is something of a hybrid situation. It is useful if you want to have the same security level as a credit card, but also wish to make sure you cannot overspend.

A prepaid card can be used in the exact same way as a credit card. You can make regular purchases or withdraw cash the only difference is that you pay in advance rather than after the fact.

There are prepaid cards that can be loaded with a specific currency with the express purpose of using it abroad. These let you take advantage of times when the conversion rate is particularly good, although there is a chance to lose money if the rate grows stronger after you have put money on the card.

This is not to say that prepaid cards are perfect. There are still fees and as well as the usual conversion fee or usage fee there can be application fees too and a top-up fee. Sometimes there is even a charge for not using the card for too long.

Dynamic Currency Conversion

Sometimes when travelling and using a card the ATM or retailer may ask if you want to pay in your normal currency or their local currency. This is known as dynamic currency conversion. Always choose their currency and not your own. It is pretty much guaranteed that whatever exchange rate they are offering is going to be worse than the rate you have on your card.

Which is the Best Option?

Credit and prepaid cards are usually going to be your best bet, although your debit card may also be a good choice if you are lucky. On top of the card, you always want to be carrying some cash too as you will not be able to use it everywhere.

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