From local currencies to learning how to haggle, these tips will help you get more from your spending
Holidays are made for forgetting your daily woes, and money is often the last thing on a traveller’s mind when faced with all the sights, activities, food and shopping you can enjoy on your well-deserved break abroad.
That is, at least, until you get back home only to be slapped with the bill, and discovering you’ve been had by a variety of hidden fees you don’t remember signing up to. While you might feel that foreign exchange and transaction fees are all just part and parcel of a jet-set lifestyle, it’s in fact a booming result for the banks that profit – just two years ago, British holidaymakers alone were reported to be wasting £1.3bn on these hidden fees.
But while our banks will always profit from our spending, there are some deceptively simple ways to drastically cut the costs without having to cut your holiday budget, so you can keep your vacation vibes going strong even when landing back on home soil.
Always pay in local currency when using your card
When paying on your card abroad it might be tempting to pay using your familiar home currency – such as GBP. After all, you know the context, the price of a meal or drink to compare it to. But in fact, when given the option, you should always choose to pay in local money. This is equally true for withdrawing cash out from a foreign ATM.
It might be a relief to see the option to pay in GBP on your ATM screen or a venue’s card machine, but this scheme is actually a nightmare of hidden-fees – one can be almost completely avoided simply by choosing the local currency.
This is because of something called Dynamic Currency Conversion (DCC), where a foreign ATM provider or bank can essentially make up their own exchange rate for you, encouraging you to convert currency into GBP at an inflated exchange rate, and then adding an extra charge for the privilege. This scheme is such a rip off to travellers, averaging a hidden fee of between 5%-7%, that earlier this year MasterCard blocked DCC from any card transaction charged to MasterCard products and prepaid card providers – including Volopa – ensuring you get the best deals wherever you travel.
Use a prepaid multi-currency card
Multi-currency cards are a great way to purchase and spend abroad while locking in great exchange rates ahead of your trip, but many people still regard them as a throwaway commodity only for use on holiday. In fact, advancements in mobile technology mean they are now fantastic ways to exchange currencies on the go, manage your personal budgets and business expenses, and avoid costly conversion and foreign transaction fees.
For example, our multi-currency prepaid Volopa Mastercard can help you instantly exchange between 14 currencies globally at the interbank rate plus a standard foreign exchange commission of just 1%. This flexibility means you can pre-purchase currency at the best rates before your trip or top up as and when you need during your travels, all while avoiding hefty foreign transaction charges when spending abroad.
Avoid buying money at the airport
Just as holidaymakers can find better deals for similar flights or hotels by shopping around, you can find better value for money for your currency too. As your last chance to buy foreign currency for your trip, airport bureaux de changes can cost you a significant amount compared to better deals online, yet one in 10 of us are still a captive market for airport exchanges.
Buying in advance can avoid you getting caught out by notoriously poor airport rates, and if you’re short of time but still want to know you’ve got physical cash in hand, many online FX providers will allow you to pick up currency from Post Offices or Airports at a vastly preferable rate of exchange.
Don’t be afraid to haggle
While city centres the world over are becoming more and more unified, there are many places where markets and independent vendors fully embrace the age-old tradition of a good haggle. And if you’re worried about short-changing a craftsman, remember tourist tax will be applied the moment you’re spotted – and so initial prices will often be well inflated from their actual value.
Therefore, haggling is not just an opportunity to get a great price for your perfect keepsake, it’s also a fun chance to engage in a bit of local banter, sharpen your negotiating know-how and practise your language skills in the process. Want tips for getting the perfect bargain? Shop around before coming back, peruse multiple items, impress your shopkeeper with your knowledge of the item and bring a friend along as a foil whenever you can.