Horrible Holiday Spending Habits
On your gap year you can convert your money in a number of ways. You can obtain your travel money before you leave, but if you’re travelling for months on end and travelling to a number of countries, then that isn’t very practical. Also, you can convert your money using traveller’s cheques, bureaux de change or ATMs abroad. Most of you are likely use a mixture of these on your gap year. However, if you’re penny pinching and you want as much bang for your buck as possible, then there are some ways which are better than others when changing your money.
Research by Moneycorp, the currency specialist, showed that British backpackers and travellers could be wasting up to £245 million of their holiday money by buying their currency after leaving the UK. According to a survey, 20% of travellers rely on getting their currency from uncompetitive sources, such as ATMs, banks and bureaux de change overseas.
The most popular way for UK tourists to obtain the majority of holiday money is before departure on the UK High Street. Over a third (38%) of people exchanged their currency at either a department store (for example, M&S, John Lewis, etc), at the Post Office or at a specialist currency exchange company. 16% used their bank and 14% used a travel agent.
The research suggested that foreign ATMs, either at an airport or high street, are one of the most widely used ways of obtaining foreign currency overseas. 12% of respondents used a foreign ATM to get the majority of their currency and almost half (46%) of UK tourists made some use of an ATM while travelling, usually as a top-up for their holiday spending fund.
69% of respondents said that price and convenience are the most important factors when buying currency. Only 8% used their preferred method because of safety / security, 3% because they have used that method before, and only 2% because of a fast service.
However, choosing the wrong place to change your money can be very costly, and when considering that hundreds of pounds can be the difference between travelling for another week or travelling for another month, it’s pretty important to get it right.
Here are five top tips on managing your money abroad:
- If you can’t change your money before you go then make sure you shop around when exchanging you money; you’d be amazed how much exchange rates differ between providers
- If you’re unsure about where to change your currency overseas, play it safe and go to a recognised brand. Banks like HSBC or Citi have branches all over the world; they may not have the best rate but it’s safer than getting ripped off by that guy on the corner selling currency
- If you are in a new country acquaint yourself with the exchange rate.
- Take a prepaid travel card; you can load up with currency before you go then use it to pay for goods and withdraw cash from ATMs. You cannot spend more than the balance on the card, so they are useful in helping you stick to a budget. The big security plus is that they are not linked to your bank account, so fraudsters have no way of accessing your bank or personal identity details
- If you’re paying on a credit or debit card and an overseas retailer offers to let you pay in pounds, reject it. It's called dynamic currency exchange and means the shop does the currency exchange, usually at a far worse rate than your own card