Top holiday currency exchange tips

Why 0% commission on travel money is a myth

Today, we’ll look at the myth of ‘0% commission travel money’ and provide some top tips on how to secure a better holiday money deal for you and your family! 

Top holiday currency exchange tips

So you’ve booked your flights to Europe. Travel insurance is sorted and the rent a car confirmation has finally come through. Travel money? Eek! For millions of Brits travelling abroad this summer, buying travel money is often left to the last minute and it's hitting our pockets hard, to the tune of hundreds of millions of pounds each year.

Travellers take note. 0% commission on travel money is somewhat of a misleading marketing slogan and in no way, shape or form represents a free travel money deal. Research by MyTravelMoney.co.uk  highlights the ‘hidden’ costs, namely the exchange rate markup can hit your pockets by up to 10% of the amount of foreign currency you are purchasing.

 According to Daniel Abrahams, Co-Founder at travel money comparison site MyTravelMoney.co.uk , holidaymakers should ‘‘focus solely on the rate of exchange being offered, not the commission being offered. The rate will determine whether you have got a good or bad travel money deal. Too many holidaymakers are offered terrible exchange rates because believe they are getting ‘free’ travel money because of the large 0% commission signs.’’

How do travel money suppliers cash in?

Travel money companies profit by selling foreign currency at the interbank rate plus a ‘markup’ which, depending on where you buy your holiday money, can be very significant. Our mystery shops have found airport bureaus adding a whooping 10% to the ‘real exchange rate’ or ‘interbank rate.’

As a top tip, always benchmark your holiday money ‘sell’ exchange rate with the ‘real rate of exchange.’ The tighter the margin or markup added, the better the deal. Typically, the best euro exchange rates are often found online.

Why are airport foreign currency bureaus so expensive?

This is a question that is often asked, and leaves millions of Brits bemused when they see so little change out of their holiday money transaction.

Firstly, rent at airports is sky high. The overheads to set up shop at an airport are some of the most expensive ‘real estate’ in the world, and naturally to cover the costs, charging the exchange rates they do is a way that airport suppliers can remain profitable.

Secondly, customer psychology and inertia is an important consideration. Suppliers know that we Brits can often be lazy and leave our foreign currency until the last moment. When panic sets in and we need to exchange money for that cab at the other end, we end up giving business to the most expensive supplier, namely airport bureaus!

What can you do to secure today’s best travel money exchange rate?

Here are MyTravelMoney.co.uk’s top 5 holiday money tips:

  • 0% commission on travel money is misleading. It covers the true cost of a travel money purchase
  • Never change money at the airport. You could be paying up to 10% due to the exchange rate markups
  • Buying travel money online works out overall cheapest
  • For added convenience, internet suppliers will deliver currency to your front door if you purchase over a minimum amount
  • Beware of dynamic currency conversion when you are abroad. If the restaurant asks you to ‘pay in pounds or euros’ always select the ‘pay in euros option.’

Daniel Abrahams is the Co-Founder of MyTravelMoney.co.uk  & MyCurrencyTransfer.com  – the world’s leading foreign exchange comparison websites.

So you’ve booked your flights to Europe. Travel insurance is sorted and the rent a car confirmation has finally come through. Travel money? Eek! For millions of Brits travelling abroad this summer, buying travel money is often left to the last minute and it's hitting our pockets hard, to the tune of hundreds of millions of pounds each year.

Travellers take note. 0% commission on travel money is somewhat of a misleading marketing slogan and in no way, shape or form represents a free travel money deal. Research by MyTravelMoney.co.uk  highlights the ‘hidden’ costs, namely the exchange rate markup can hit your pockets by up to 10% of the amount of foreign currency you are purchasing.

 According to Daniel Abrahams, Co-Founder at travel money comparison site MyTravelMoney.co.uk , holidaymakers should ‘‘focus solely on the rate of exchange being offered, not the commission being offered. The rate will determine whether you have got a good or bad travel money deal. Too many holidaymakers are offered terrible exchange rates because believe they are getting ‘free’ travel money because of the large 0% commission signs.’’

How do travel money suppliers cash in?

Travel money companies profit by selling foreign currency at the interbank rate plus a ‘markup’ which, depending on where you buy your holiday money, can be very significant. Our mystery shops have found airport bureaus adding a whooping 10% to the ‘real exchange rate’ or ‘interbank rate.’

As a top tip, always benchmark your holiday money ‘sell’ exchange rate with the ‘real rate of exchange.’ The tighter the margin or markup added, the better the deal. Typically, the best euro exchange rates are often found online.

Why are airport foreign currency bureaus so expensive?

This is a question that is often asked, and leaves millions of Brits bemused when they see so little change out of their holiday money transaction.

Firstly, rent at airports is sky high. The overheads to set up shop at an airport are some of the most expensive ‘real estate’ in the world, and naturally to cover the costs, charging the exchange rates they do is a way that airport suppliers can remain profitable.

Secondly, customer psychology and inertia is an important consideration. Suppliers know that we Brits can often be lazy and leave our foreign currency until the last moment. When panic sets in and we need to exchange money for that cab at the other end, we end up giving business to the most expensive supplier, namely airport bureaus!

What can you do to secure today’s best travel money exchange rate?

Here are MyTravelMoney.co.uk’s top 5 holiday money tips:

  • 0% commission on travel money is misleading. It covers the true cost of a travel money purchase
  • Never change money at the airport. You could be paying up to 10% due to the exchange rate markups
  • Buying travel money online works out overall cheapest
  • For added convenience, internet suppliers will deliver currency to your front door if you purchase over a minimum amount
  • Beware of dynamic currency conversion when you are abroad. If the restaurant asks you to ‘pay in pounds or euros’ always select the ‘pay in euros option.’

Daniel Abrahams is the Co-Founder of MyTravelMoney.co.uk  & MyCurrencyTransfer.com  – the world’s leading foreign exchange comparison websites.

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