Four years ago, I had the pleasure of studying abroad in Australia for a year. My living and academic arrangements were all sorted. But personal finance? I didn’t have a clue.

Regrettably, I had no idea about foreign exchange, and it cost me dearly. By my conservative estimates, I frittered away in the region of £2,000 over the course of the year. The term ‘0% commission’ became my superficial best friend, and ultimately my worst enemy.

My friends and family cannot stand how I leave everything to the last minute. Sorting out my foreign exchange was no different. I’d rock up to the airport, see a big sign saying ‘0% commission’ and think yes, I’ll have a piece of that. This became the norm, every time I’d either send money to and from Australia, or simply buy Australian dollars in cash.

Fast forward a couple years, and I started wondering about currency exchange in general. Questions arose in the form of, am I being ripped off here? Are these 0% commission slogans all they’re cracked up to be? The banks do it, the airports do it and the vast majority of FX agencies do it.

And then the analytical and cynical part of my brain kicked in. If they are offering their exchange services for free, how are these companies making their money? Many of us are often blinded and ultimately tempted by these deals that we don’t bother to research the real maths behind them.

A little more delving helped me find out how the rates advertised by many foreign exchange companies are not the same as the official rate. In other words, while you get a nice 0% commission deal, the exchange companies actually give you a lower exchange rate than the ‘real rate’ and they pocket the difference. In many cases, the difference can be vast. Of course, these companies need to turn a profit, but their less than transparent marketing tactics leave a lot to be desired.

Since we launched MyCurrencyTransfer and it’s sister company MyTravelMoney, we’ve been through extensive mystery shopping research. We’ve found that exchange rates between 1 and 2 percent away from the live exchange rate represent competitive currency deals. You’ll find the most competitive rates online and it really does pay to do a little exchange rate homework before you travel.

Daniel Abrahams is co-founder of MyCurrencyTransfer.com