Consumers are being ‘fleeced’ to the tune of over £5bn by making bad currency decisions, according to currency company FairFX.
The FairFX ‘Daylight Robbery’ campaign is a new investigation designed to inform how much consumers are losing out in hidden fees, unnecessary charges and bad rates by not planning their currency in advance.
The results show that by opting to pay in pounds on card when abroad, buying travel money at the airport and using credit and debit cards overseas, consumers are adding an excessive £1.3bn to their holiday costs a year.
And the amount of wasted cash adds up even further when you include the estimated £2.1bn in leftover currency we bring home from holiday.
The new FairFX investigation also helps consumers realise the financial impact of not planning ahead when it comes to currency with a potential £1.7bn difference between buying when exchange rates were at their strongest this year compared to their worst.
In total, the FairFX Daylight Robbery investigation reveals consumers are spending up an unnecessary £5.1bn a year.
Ian Strafford-Taylor, CEO of FairFX, said: “Consumers may be forgiven for thinking that bad currency decisions only cost a couple of pounds here and there but our new investigation reveals the true extent of how much we’re missing out. The fact that we’re potentially losing £5bn a year through unnecessary fees and poor exchange rates is nothing short of daylight robbery. Fortunately, it’s not too late and a few smart moves can ensure that we take back control of our currency choices and save significantly whenever it comes to spending money overseas whether you’re going on holiday, buying a property, planning a wedding, studying overseas or travelling.”
FairFX’s tips to avoiding ‘daylight robbery’ fees:
Never pay in pounds: If you’re given the option to pay in pounds, always say no – this is a trap called Dynamic Currency Conversion which often offers poorer rates and additional fees.
Avoid the airport: Buying currency at the airport means you’re likely to be faced with the worst exchange rates in the country.
Use the right plastic: Make sure you know the charges for using your card abroad – will you face both a transaction fee and non-sterling fee? Planning in advance and making the right choices such as considering a prepaid currency card, will help you avoid fees every time you use your card.
Don’t forget your change: It’s easy to forget your leftover currency when you get back from holiday but don’t waste it! Be wary of poor buy-back rates and try selling on to a friend, donating to charity or remember to take it away with you next time. If you have a FairFX prepaid card, you can withdraw leftover currency in sterling when you’re back in the UK, spend it in the shops or use it on your next holiday.
Don’t leave it too late: FairFX research reveals one in 10 of us leaves buying currency until the last minute which means you’ll have no choice over your rates. Start monitoring rates as soon as you can and buy when the rates move in your favour to lock-in the best value – a free tracker from FairFX will do this for you.
Consider an alternative: Prepaid currency cards allow you to guarantee your exchange rate in advance and are free to use in shops and restaurants when you’re abroad, meaning you have full control over what you’re spending.