0 The hidden truth behind travel money

The hidden truth behind travel money – the complete guide for penny pinchers

Every year we sit around and wait for that period of time when we can forget about work, leave the kids with grandma and get on a plane bound for a far and mystical destination. We spend hours planning it; which hotel is best value for money, plan routes, compare ticket prices and research the amenities at our chosen place of holiday. On my last trip to Brazil with my wife I couldn't believe how much money we wasted on exchange rates in retrospect. Once home, I educated myself on the subject. Astonished at what I found, I wanted to share it with others so they won't make the same mistakes we did.

You must think, “it can't be that much”. Well, if you are converting Euros to Dollars you can possibly lose on €40 for every $500 you exchange! That got your attention didn't it? There are 2 elements to consider when approaching the matter; the exchange rate offered and commission fees. Exchange Bureaus make their money from the difference between the value they buy and the value they sell. The higher the exchange rate they offer - the better, so you better find out what the current exchange rates are before buying or selling any sort of currency. Commission fees may be in the form of minimum charges, flat fees and handling fees. Beware, some bureaus may offer great exchange rates but come with high commissions and vice versa. Do your research – and pay attention to the details.

So here are some pieces of advice on how to save a buck or two. First and foremost, stay clear away from Airport bureaus – they are exchange death traps and are renowned for offering poor exchange rates as well as high commissions. Also, whilst you might expect your bank to give you the best deal on foreign currency – don't just assume since it will not always be the case.

Whilst away, pay cash whenever you can - credit card usage often involves transaction charges which might not seem a lot at the time but trust me, they pile up. Using your debit card for purchases abroad might cost you approximately 2% - your bank doesn't like it when you exchange your money elsewhere (Check your bank credit policy before jetting off). Of course it would be foolish to carry so much cash, the last thing you want is for it to get lost or stolen and ruin your time away.

So what other cash alternative are there to ensure your piece of mind? Prepaid cards have the same usage as debit/credit cards but without the exchange rate fees , they work by charging them with cash before the holidays. Travellers cheques are also a safe bet though slightly outdated. However, even these two are subject to different fees, so read the fine print.

In conclusion, my advice to you, is to spend as much time planning your holiday money as you do the rest of your trip. There is nothing worse than returning from a trip and seeing a big dent in your bank account, especially when you will already have the post-holiday blues!