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Travel Money: Our Money Saving Tips
More and more of us are paying high prices to change our hard-earned cash into foreign currency especially at the
last minute but you don't have to pay the price at the “ bureau de charge”. The following will offer you the cheapest
ways to obtain your cash abroad by examining foreign currency, “plastic” (credit cards, debit cards and prepaid cards)
and travellers cheques
Currency variable rates
So has foreign currency exchange been surpassed in favour of plastic cards? The answer is generally, yes. If you have
the right card you will almost certainly save money when compared to exchanging your Sterling for foreign currency.
However, for some, any forms of cards, whether it is a credit card with charges or the new breed of prepaid cards,
are off-putting and of course the wrong card can carry risks. Cash is also the easiest to use but, at the same time,
is the easiest to lose or have stolen so don't take more than your travel insurance covers. (Check that it does or ask
your travel coordinator to select Travel insurance that does… In those cases, exchanging money is probably right for
you – but still make sure you're getting the best deal. I always carry some cash of my “home” currency –
with some cash of the country I am visiting – for emergencies e.g. overnight hotel. This cash is also useful to be easily
exchanged by various “Sources” if you arrive on a Bank holiday or impromptu Fiesta etc (Be prepared…)
Don't assume that a sign saying 'commission free' automatically means you're going to get a great rate.
In actual fact you should be very wary of 'commission free' offers because the chances are that you will be offered a
worse exchange rate than the bureau itself receives, allowing them to make profit that way. The only way to tell is to
ask how many euros/dollars, etc, you will get in exchange for your “Home” currency. Simple as that! Some companies
don't have commission charges – so if their exchange rate is competitive they are worth a look. However,
don't rule out those that do charge commission, as their rates can still be more competitive.
To have to do your sums (Math) especially if changing a larger amount.
Also don’t rule out exchange booths they can be competitive because of low overheads, eager to get the business or
slow to react to negative exchange rates
Be wary however, of flat fees and minimum charges. Minimum charges make it difficult to change small amounts
of money but flat fees can offer good value if you are changing larger sums of money. Watch out for handling fees too
, which can be high . Also consider your own bank or building society as they might have preferential rates for their
account holders. N.B. If your budget is tight – talk to your local branch and check you have a reasonable overdraft
facility in place for emergencies - the cost of an unauthorised overdraft can get very expensive
Cheque Mate
Option two is the trusty travellers cheque, which is certainly one of the most secure methods of carrying your
money abroad. Indeed that’s the overriding advantage of travellers cheques because as long as you make a
note of the cheque number or make a photocopy (and don't lose that too!) you can travel with peace of mind.
The downside however, is that they're not always the cheapest way to carry your money abroad. In fact expenses
can mount up as you are usually charged commission when you buy Sterling cheques and an exchange rate
is applied when you exchange them into local currency. Once again, shopping around for the best deal becomes
crucial and don’t go for too small cheque denominations (It costs every time you cash one in)
With foreign currency travellers cheques those who think ahead, get ahead. Keep an eye on the exchange rate and
look to transfer funds potentially well ahead of time. If you find a good rate, capitalise on it – and if you think the rate
is going to drop further then why not play safe and change half your money? Also look out for good deals.
Some providers may offer free commission, especially for students or no commission to change back – all adds up!
Deals that don't charge commission won't automatically be the best deals – you have to check their exchange rate and
make sure it is competitive. Also be aware that when cashing in cheques abroad you are likely to face an
additional charge ( handling charge) As with foreign currency, exchange rates for foreign currency travellers
cheques constantly change so shop around and take a thorough look at the market before deciding on
the right option for you.
Plastic fantastic – debit cards
Carrying cards abroad is certainly a lot safer than carrying cash, as the vast majority of card providers will offer
free card replacements that can be sent to you in the event your card goes missing. (Some “within 24hrs” –
as long as you can get to a supporting office or branch) Cash cannot be replaced in this way. Finding the right card
will allow you to make impressive savings and will work out much cheaper, safer and convenient than a
foreign currency exchange or travellers cheques. Find the wrong card however, and, as with any form of
credit or debit card, you'll pay for it.
The most important element to watch out for with a card is the fees. There are two main charges for using
a debit card abroad. One is a loading fee (also known as a conversion fee) - this is usually about 2.75%
(which is far too high - anything more than this and you're paying way over the odds). Indeed there are a
handful of issuers who don't charge a loading fee at all. But having said that, I think the convenience of
being able to use almost any Local ATM almost anywhere in the world is marvelous. Unfortunately there are
still a minority of retail outlets (Or staff) that are dishonest. Cash withdrawals will also incur charges –
this is normally a percentage of the amount withdrawn though the total fee for one withdrawal is usually capped,
making it more cost effective to withdraw larger sums of money. Other banks will just charge a flat fee.
Also be wary of any potential charges delivered by the overseas bank itself when you withdraw–
even if it is your “Home’ bank. Always try and scout around to find a lower charge or rather the best Bank!
Be wary of fees for spending too. Unfortunately, this is an increasingly common practise with banks grabbing
every penny they can from holidaymakers and charging high fees for every transaction. Among the chief
offenders are the debit cards from Lloyds TSB, Halifax, RBS, Intelligent Finance and NatWest.
HSBC have charged a fixed annual fee to get a better deal? ( at 7th May 2008)
Always… check the up to date small print
Give me credit
A lot of providers will have special travel credit cards purposefully targeting the frequent flyer with points and
other loyalty rewards. Of course these bonuses are great but the fees and the interest rate should always be
your first consideration if you intend to use your card abroad and also if you plan to borrow. With that in mind
it's often a good idea to have a credit card just for using when overseas – and that can be paid off in
full each month.
As with debit cards, watch out for loading fees - conversion charges that incorporate the processing fee -
usually set at 2.75%.
If you have a credit card then watch out for immediate interest charges, particularly for cash withdrawals.
These incur interest when your balance is not repaid in full. Even if like me you pay your credit bill at the
end of the month –it will be only when the payment is received that the interest build ends!
This caught me out when I was a young married traveller – when I thought all banks were nice people.
In general it's best to avoid using a credit card to withdraw cash abroad, as you would at home but in an
extreme emergency a very valuable addition to your list.
Despite the potential charges, if you shop around there are some fantastic credit cards to use overseas
which don't carry loading charges and have low ATM fees. One of the crucial advantages of a credit card
is that there are a host of cards with 0% on purchases for as much as 12 months. This will allow you to
make purchases without being stung by interest charges - but do be wary to make sure you are not
being hit with a loading fee, and make sure there are no restrictions on overseas purchases.
Also, the majority of credit card providers will supply a free replacement card. So if you misplace your
credit card or it is stolen, contact your credit card company and they will send you a replacement.
This offers a level of security that simply isn't available with cash. But again read the small print….
Post Office Classic – The Post Office Classic card is one of the leading credit cards to use at home and
abroad with its typical rate of 14.9%APR. Where this card comes into its own for travellers however,
is that it is commission free for use abroad. There is an introductory offer for purchases of 0% p.a.
fixed for three months and an introductory offer for balance transfers of 0% p.a. fixed for eight months.
In addition, there is a 24hr service available so if you do misplace your card whether at home or abroad
you can call the emergency contact number and receive a replacement card for no charge.
The new plastic power - Prepaid cards are the alternative way to pay abroad, acting as the effective
'pay as you go' debit card. The advantages of prepaid cards are numerous as they offer increased
safety and, if you're buying online or on the phone and your card is used fraudulently you will be able to
get your money back. Furthermore, there is no debt risk as you control the funds you place on the card,
and prepaid cards are more accessible – you can get a prepaid card without having to worry about
your credit history.
So what's the downside? Unfortunately, with prepaid cards being a relatively new phenomenon the market
isn't too competitive just yet (though it is expanding). Consequently, there are still a lot of fees to
be wary of such as card application fees, ATM withdrawal fees (which is often higher overseas) and
charges for top-ups. However, more prepaid cards are emerging which drives these fees down, and,
additionally, there are prepaid cards designed specifically for travel which limit overseas costs such as
spending overseas, ATM withdrawals, etc.
I
Card users beware: dynamic currency conversion
Merchants and retailers overseas might offer you something called 'dynamic currency conversion'.
This means they charge you in your “Home” currency rather than the currency of the country you're
travelling in. This is “sold” as being convenient and gives you a familiar perspective of the price you're
paying - but you will normally be hit with a higher exchange rate for this service so never use it and
always CHECK before signing anything or entering your PIN - they might not always ask!
So if you see a conversion, make sure you ask to be billed in the local currency.
Travel Link Co-ordinators recommends...
So with all these alternatives what do we suggest you do? Well generally, we'd say opt for a debit or
credit card as your main source of travel money, when travelling abroad. Choose one that doesn't
charge loading fees. Currently the Post Office comes out on top in the credit card category with no
commission charge for use abroad. If you can't be bothered applying for a new card then do not
use them for cash withdrawals unless you really need to. Be sure to shop around to get the best
exchange rates. As a back up, for security, you might also consider travellers cheques and prepaid
cards in case of emergencies. Good luck and enjoy your trip!
Passport - Ticket – Cards (Ideally two types per two travellers) Cash 1 & Cash 2 –
Mobile/ Cell phone (International card) AND Emergency contact numbers/addresses
MORE INFORMATION ABOUT TRAVEL MONEY AND CHEQUES
CURRENCY DELIVORED TO YOUR DOOR!
AIRLINE MEWS?
US airline JetBlue faces a quandary. It positively hates canceling a flight, preferring instead to operate
a troubled or delayed service, seeing that as slightly less inconvenient to the traveller. Last December,
for example, it discarded just 30, four times better than the US national average.
Conversely, the budget carrier had a punctuality score of 71.4% flights on time, six percentage points
worse than the norm. Strangely, however, JetBlue's complaint record was 29 passengers per 100,000,
three times better than the average.
This goes against the grain, for every airline survey worth its ink identifies punctuality as a major priority
for the business traveler. Time, after all, is money, a fact branded into the executive psyche.
Stooging around in airports at the mercy of flight delays and cancellations is costly in terms of
working hours lost, possibly a missed connection or meeting, and in a worst case scenario,
an opportunity snapped up by a rival.
While JetBlue's experience might illustrate the old adage about damned lies and statistics,
it could equally reflect the fact that frequent flyers will often accept a hiccup or two,
resigned to the fact that frustration is their natural burden.
The facts support this gloomy philosophy. In the first quarter of this year, the Association
of European Airlines’ consumer report found that 97.7% of short/medium haul flights and 99.5%
of long-haul services operated as planned. However, only 79.3% of the former and 68.7%
of the latter departed within 15 minutes of the scheduled time, the yardstick by which performance
is measured, with services that fail to meet the criteria regarded as delayed.
There is wide disparity in staying within the parameters. At the go-to-the-top-of-the-class end
of the scale, BMI regional was named the most punctual scheduled airline at UK airports for 2005
by www.flightontime.info, achieving 88% success. And in April this year, Belgian business carrie
r VLM Airlines recorded 92.4% flights bang on the button.
Such figures contrast sharply with the marks awarded to Asia/Pacific in the Carlson Wagonlit
Travel’s Business Travel Indicator, published in January. Disappointingly, it revealed that 61%
of travelers in Australia, India and Japan are affected by flight delays.
There is no quick-fix answer to the problem, according to a report by the Performance Review
Commission, which monitors the management of European air traffic.
Acknowledging that punctuality is of major concern for both industry and passenger,
it said performance is the result of a complex interrelated system.
Far from being an exact science, this involves airport scheduling capacity, infrastuctural,
political and environmental factors, air traffic control and runway capacity. In what is known as variability,
delays can be caused by the airport, the airlines, congestion in the sky, ground handlers, bad weather,
tardy passengers, and reaction to late arriving flights.
If fearing all the contributory factors will not combine neatly on the day is a worry for the business traveler,
spare a thought for the airlines. Currently paying a record $72 (€56) a barrel for fuel,
much of it wasted queuing for take-off or stacked waiting to land, they must also include strategic time buffers
in their planning to account for predictable delays while maintaining an acceptable level of punctuality.
Each buffer costs around €50 a minute for an Airbus A320, and if they could be reduced by an average
five minutes on 50% of scheduled flights through better use of airport and airline resources,
some €1 billion ($1.27 billion) per annum would be saved in Europe alone.
With such considerations in mind, airlines and airports have working groups dedicated to improving
and optimizing their operations. This approach is applauded in the report by the
Performance Review Commission, whose subsequent workshop had its own recommendations.
Identifying “the need for a cultural change to more proactive, transparent,
no-blame management of air transport operations”, it added that airlines, airports, and air traffic control
should move from an “insular perspective” to a more general focus on overall performance.
The entire airport community should work more closely together to develop a common understanding of
objectives and set clearly defined targets.
The message calling for corporate cooperation seems to be getting through. Hall 2 at Paris Orly West airport
for example, has been completely refurbished by Paris Airports Authority and Air France.
It now includes streamlined boarding, disembarkation, security and check-in areas, and an automatic
sorting system to speed baggage to the aircraft.
“Thanks to the dedication and continued efforts of Air France teams,” says Jean-Cyril Spinetta,
the airline's chairman and CEO, “operational efficiency and flight punctuality are now among
the best in Europe.”
Meanwhile, back in the un-reconstituted world, delays will occur as sure as night follows day
and a travel management company (TMC) will ride to the rescue – or at least point out the
areas travelers should research.
Says Norman Gage, director of UK-based Advantage Business Travel
: “Airlines make it difficult for travel management companies to let their customers know whether
there is a delay or not.
So the job of a business travel agent should be to monitor the continual offenders in delayed
or cancelled flights in order to alert their customers and, if necessary, find a suitable flight with
a more reliable airline.”
Business travelers without a TMC or lacking the resources to scrutinize airline records
can always accept the inevitable and while away the wait with a good book.
