Beat the holiday money rip-offs

The disappointing slide in the pound means it’s more important than ever for holidaymakers to make sure they don’t get ripped off when spending abroad.

Sneaky currency conversion traps at the checkout, hidden loaded rates and hefty bank fees mean we routinely hand over more than we need to.

To help cut costs and make your pound go a little further, here’s four of the most costly holiday money traps to avoid.

Say no to paying in pounds

When you pay your hotel bill or spend in shops abroad you are often given the option to pay in pounds, rather than the local currency.

But this allows the retailer to use their own exchange rate for the conversion.

This proves far more expensive as they often load the rate by between 5 to 10% – and in some cases up to 30% – according to currency specialist, Caxton FX.

This is on top of any charges made by your bank for overseas spending.

Avoid buying currency at the airport at all costs

The most competitive exchange rates are typically found online, so try to compare prices and buy in advance.

But, if you forget to do this in time, make sure you at least avoid buying your holiday money at the very last minute, before you fly.

Airport exchange rates can be as much as 20% lower than the market rate, according to Fairfx research.

Pick the card you travel with carefully

Banks charge around 3% every time you swipe your card in shops overseas, plus an extra 3% to withdraw cash.

To avoid these eye-watering fees, our favourites credit cards for cheap holiday spending include the Halifax Clarity card, Tandem Bank’s cashback credit card (which also pays 0.5% on all spends) and Santander’s Zero card.

Prepaid currency cards are one of the safest options to travel with as they are not linked to a bank account.

You can load up when the rate is good and spend as normal with bank-beating exchange rates and low fees. Check the small print first though, some charge sneaky dormancy fees.

Try currency specialists such as

Only pay in local currency

Making payments in pounds rather than the local currency at shops, restaurants and even at cash machines leaves tourists out of pocket after tempting them into a poorer exchange rate.

The practice, known as ‘dynamic currency conversion’, allows retailers and foreign banks to set their own conversation – adding up to 10% on bills.

Last year £490 million fees was taken out of the pockets of unsuspecting Brits, according to research carried out by Fairfx.

To avoid being ripped off travellers are advised to always choose the local currency no matter where in the world you are. And the same applies if you’re using an ATM.

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