James Warner Smith, the senior personal finance editor at money.co.uk, has warned holidaymakers could end up “getting ripped off” if they don’t take some careful considerations when switching their pounds into foreign currency.
According to Mr Warner Smith, even if you’re whisking your family away on a last-minute trip, there is one holiday faux par travellers should avoid.
“Do not exchange money at the airport, their rates are almost always less favourable than you can get in advance,” he told Express.co.uk.
Travel money losses don’t just happen during the initial exchange, however.
Mr Warner Smith points out holidaymakers can often find themselves caught short mid-way through their vacation, and facing headache-worthy costs.
“Never be tempted to withdraw on a credit card abroad,” he warned.
“If you don’t buy all of your currency in advance and need to withdraw more abroad or even just buy something, you can be hit by foreign transaction charges on your card – effectively paying to spend money.
“This is particularly painful for smaller transactions, with a £3 fee potentially applied each time you take money out or spend on your card.
“The typical percentage fee charged is about 2.99 percent, sometimes with a minimum amount, although balanced against that is the fact you are getting the same exchange rate as the bank.”
The warning is also extended to shoppers, especially when eyeing up souvenirs that boast price tags in sterling
“At all times beware anyone offering to let you ‘pay in pounds’ when abroad,” said the travel money expert.
“That lets the seller or even the ATM set its own exchange rate, and you can bet it won’t be in your favour.
“By contrast, when you pay in the local currency you get the Mastercard or Visa exchange rate – which almost always works out cheaper even after any fee your card provider adds.”
Travel money cards act much like debit cards, but can be topped up online, and promise no fees for spending or adding extra money.
They are also widely available, with high street travel money providers including the Post Office offering their own version.
“It doesn’t matter how good you are at budgeting or how savvy you are with your cash, you should take a backup card of some kind on every holiday,” continued Mr Warner Smith.
“Use either a pre-paid travel card that you can use when needed, some debit card will also allow you to withdraw cash and spend with no extra fees so check with your bank before travelling to ensure you don’t get caught out.
“It is also important to make sure you withdraw your money from a cash machine that does not charge heavy commission fees.”
For Britons who are eying their next holiday, Mr Warner Smith suggests hunting for the perfect travel money card sooner rather than later.
“The simplest way to make sure you get a good deal is to get the right travel card now that you can top up nearer the time or even when on holiday itself using online banking,” he concluded.
“Some of these also let you transfer cash into your chosen currency ahead of time, letting you lock in good rates when you see them.”