So, you’re on the way to the airport. Your bags are packed, your passport is in your coat pocket and that just leaves one last thing left on your travel checklist – to buy your travel money at the airport. But once you get there, all those currency abbreviations and complex figures can start to merge into one confusing blur. You’re in a rush, you take what’s on offer, grab your money and run. After all, that 0% commission deal seems too good to miss.
A couple years ago, that’s exactly what I did before embarking on a trip with friends to sunny Marbella. It was the last time! Today, I want to show you how you can be super savvy when it comes to the not so sexy issue of foreign currency.
After all, you might not realise at the time that you got a bad deal, but you did and you could have made your money go so much further, and here’s why. Falling for the marketing hype in any situation can be costly, but the good news is there are ways to avoid being ripped off on foreign currency exchange.
What The Bureau de Change And Banks Don’t Want You To Know
Okay, so let’s go back to that 0% commission marketing. It sounds good, but when you actually break it down, it doesn’t mean much at all. Like most marketing messages, it’s a cleverly concealed way to make you buy. Foreign currency exchange companies need to make a profit and they do this in two different ways. The first is through a commission cost and the second lies in the profit that is built into the exchange rate. Think implicit and explicit fees.
Most companies are happy to forgo the commission because they know they can make a bigger profit from the exchange rate instead. They buy their foreign currency wholesale and then sell it to customers for a dreadful exchange rate. They are then free to use their 0% commission marketing hype and everybody is seemingly happy.
How To Find The Most Competitive Exchange Rate
So, if there are no charges to worry about, it’s the exchange rate we should turn our attention to. You should look on the exchange rate as the most important part of the foreign exchange process. The best way to get a competitive rate is to check out the ‘real’ mid-market exchange rate – this is the rate at which currency is trading on the markets. You can then aim to find an exchange rate that is no more than 2% away from this amount.
The most competitive exchange rates can be found online and there are many currency comparison websites offering impartial advice, side by side comparisons and consumer reviews. This is a great way to check out the latest rates, offers and comments so that you can find the best currency exchange company to suit your needs.
Plan Ahead To Find The Best Currency Deals
It is entirely possible to shop online for the best deal and to even have your currency delivered direct to your front door. By planning ahead, even just a few days before you are due to travel, you can get access to the best exchange rate for the currency you are going to be exchanging and total peace of mind that you couldn’t have got more for your money elsewhere.
Once you shop for your currency in this way, the days of dashing to the airport bureau de change or queuing up at your bank will be well and truly over.
Bon voyage!
Daniel Abrahams is a keen travel writer, entrepreneur and co-founder of MyTravelMoney, an award winning travel money comparison site. Recently, Daniel returned from Austin, Texas where he attended SXSW as part of a UKTI government trade mission.
Intro photo: Images Money