Currency conversion confusion costs consumers £350m every year
The latest Holiday Habits study indicates that last year 52 per cent of British holidaymakers attempted to keep track of their spending by converting foreign currency into pounds, but 28 per cent made a mistake due to currency conversion confusion.
These errors resulted in them buying items that they thought were overpriced (45 per cent) or items they wouldn’t have otherwise chosen (36 per cent). In the most extreme instances, 27 per cent actually ran out of money as a result.
For 44 per cent of those making a mistake, struggling to make a mental currency conversion is the cause for miscalculation. A similar proportion panic while trying to make a quick decision (42 per cent), while 37 per cent fail to remember the correct exchange rate in the first place. 24 per cent admit to making mistakes while under the influence of alcohol.
Extravagant designer purchases (16 per cent) are the main culprits for overspending abroad, followed closely behind by holidaymakers splashing out on local delicacies (15 per cent), gifts (12 per cent) and souvenirs (10 per cent).
These rash financial commitments are made despite an apparent tendency toward prudence and frugality among UK holidaymakers. 78 per cent conduct research to get the most competitive exchange rates, and 54 per cent actively haggle to secure the best possible price when shopping abroad.
“Currency conversions you do quickly in your head can often lead to a big headache later,” said Katherine Whitton, chief marketing officer for Barclaycard.
“Our research shows that holidaymakers can really benefit from reminders and alerts to help them manage their money, such as setting spend limits.”