Whenever you take a trip overseas, whether for work or leisure, chances are that you’ll need some local currency to spend. And if you’re moving to another nation on a permanent or semi-permanent basis, you’ll probably need to access varying amounts of foreign currency fairly regularly.
There are several different methods when it comes to exchanging your Pounds for different currencies, but some of these choices can leave you more out of pocket than others.
One particular issue that has been in the news recently is the ability to pay in Pounds when abroad rather than in the local currency, via Dynamic Currency Conversion (DCC).
Offered by an increasing number of shops, restaurants, and cash machines, DCC might seem like a good idea on paper but can lead to unnecessary spending due to applied charges.
While one transaction might only lose you a little bit of money, this can quickly add up if you spend a prolonged amount of time abroad and choose to pay with DCC frequently in day-to-day life. Depending on the country and the type of transaction, a charge of anything from 6-10% could be added onto every transaction paid in Sterling.
According to the BBC’s Simon Gompertz;
‘At a cheesemonger, once my card went into the payment machine, up popped a choice: a price in Euros and a price in Pounds.
What happens is that if you buy in Euros the transaction goes through a standard route, with the exchange rate set by Mastercard or Visa, although your bank can impose an additional charge.
But if you choose to pay in Pounds, your money is changed on the spot by the shop’s bank or payment processor. And they decide on the rate.
With the cheese I was buying, that meant a loss of 3.5% compared with the Mastercard rate.
Then, in a bar for lunch, I was offered an exchange rate which hacked a 5% slice out of my money.’
But what other options do you have when it comes to accessing foreign currency?
If you’re going to be abroad for a reasonable amount of time, it makes sense to open a local bank account in your destination country. In that way, you can move money from your UK bank account to your foreign one and have ready access to your funds.
Such currency transactions can be conducted through your bank, but you may receive a poor exchange rate and be charged transfer fees – eating into the amount you ultimately receive.
Leading currency transfer providers, on the other hand, can offer excellent exchange rates and transfer funds on a fee-free basis, helping you enjoy significant savings. Additionally, you’ll have access to your own Account Manager, a currency expert with the knowledge to provide invaluable insights about currency market movements.
With some currency transfer providers you also have the option of making transfers 24/7 with online trading facilities and apps, giving you the flexibility to make transfers as and when you need to while benefiting from a bank-beating exchange rate and no fees.
A specialist currency transfer provider will also be able to give you access to a range of services which can be tailored to your particular needs – from fixing an exchange rate up to two years ahead of needing to make a transfer to automating recurrent transactions with a regular overseas payments scheme.
If you’d like to find out more about the different ways of maximising your international money transfers, read up on your transfer options.
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