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Holidaymakers “clueless” about currency exchange

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Written by: Emma Lunn
04/10/2019
More than a quarter (28 per cent) of holidaymakers don’t know they pay commission or fees when exchanging money into foreign currency, according to Monese.

A survey by the banking service found that just over half (53 per cent) of Brits said they withdraw holiday money from their bank branch.

A quarter (25 per cent) of the UK public believe that this is the most cost-effective solution to exchanging holiday money, while 22 per cent think contactless payments using a traditional bank debit card, or a credit card, represent the best value for money.

But Monese points out that cash withdrawals using a debit card typically deduct up to 3 per cent of what you take out or charge a minimum fee of up to £2. In addition, some credit cards will charge you interest for cash withdrawals on top of other fees. Additionally, contactless payments with a traditional bank or credit card, may be liable to currency and bank charges.

The research also found that the average Brit spends £1,570 on a foreign holiday. Before the 2016 referendum this would have bought €2,198, but would only be worth €1,727 now. This is compounded by less cost-effective currency exchange options which can include hefty fees and commission.

Monese found that only 30 per cent of holidaymakers choose their method of currency exchange because it is cost effective, with more than half (53 per cent) going for the most convenient option.

Monese is calling for people going away this half term or planning their Christmas holidays to consider different options when thinking about currency to ensure they aren’t being hit be unexpected costs.

Norris Koppel, Monese founder and CEO, said: “Consumers aren’t currency traders, so any fluctuation creates uncertainty. Factor in hidden bank fees, ATM charges and poor exchange rates and your money further depreciates. We increasingly see holidaymakers, students, expats or those with family abroad looking to protect themselves from fluctuations.

“It’s always worth shopping around. There are a growing number of ways that holidaymakers can exchange and spend cash when abroad from using mobile-only alternatives and fee-free banking services. Being hit by hidden fees and commission is always frustrating but especially during a time when the euro and the dollar are hitting highs against the pound, weakening our spending power. We want holidaymakers to make the most of their hard-earned cash when spending abroad.”

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