The BBC reported on 23rd May 2018 on a travel money rates issue which many UK travellers have long suspected exists.
A survey of 8000 customers and a government led investigation have delivered research findings which confirm that travellers are paying thousands of pounds in hidden fees when they purchase their currency.
It’s estimated that the average British traveller pays more than £5000 in hidden fees over their lifetime, with people who own holiday homes or retire abroad (with inflation factored in) being charged almost £17000.
The BBC report claimed that “Fewer than half of those surveyed were able to pick the best of four foreign exchange deals using the information typically provided by suppliers such as banks, post offices and bureaux de change.”
How Suppliers Make Money
There are two exchange rates: Wholesale and market. The difference between them represents the hidden cost which the consumer is subject to.
The big high street names are keen to advertise no commission and no fees, but these plus factors take attention away from the true picture. Bear in mind that the commission fee which the lucky customer avoids is not the only source of revenue from the transaction; holiday exchange rates can be poor. This is obviously not beneficial to customers.
Branch network suppliers – e.g. travel agents, banks, supermarkets.
When using the exchange rates offered by suppliers with a branch network there are overheads like utilities, rent and wages to factor in to each deal so that a profit is made. You can waste a lot of shoe leather traipsing up and down the high street trying to locate the best deal.
Please don’t leave your purchase until the airport or ferry; the holiday exchange rates offered are not customer friendly. You haven’t got the time or freedom to go elsewhere and suppliers take full advantage of this.
Online suppliers and exchange rate comparison firms – e.g. Travel Money Rates.
The online suppliers make a profit, but because overheads are minimal they can offer more value to customers.
Consider exchange rates comparison websites as a user friendly one stop shop. Comparisons of all the major suppliers travel money rates and fees are clearly shown within seconds on the screen so that from the comfort of the sofa or behind the desk, an informed decision can be made about who to use for currency delivery or collection. A little data input, a couple of clicks and an order is placed.
Business travellers habitually choose banks for their travel money, but as you’ll see below, this can be a costly error.
Travel Money Rates website exchange rates comparison, 23rd May 2018:
£400 to Euros with delivery service.
The best deal available:
- The Currency Club – rated 5* by consumers.
- Rate: 1.22.
- No delivery charge.
- Total €448.84.
The 3 least preferable deals: Natwest, Barclays and HSBC.
- The lowest on the list was Natwest – rated 1* by consumers.
- Rate: 1.0894.
- £5 delivery charge.
- Total €430.31.
Two minutes of investigation on a site like travelmoneyrates.com can save you a considerable amount.