Britons using an ATM abroad will usually be asked if they want to pay in the local currency or in pounds. Nilan Peiris, chief product officer at Wise, explained why it’s so important for Britons to pay in the local currency. He said: “When traveling, lots of firms will charge you commissions on exchange rates, from booking sites to airlines, which can add up quickly. Keeping an eye out for those pesky fees can help you avoid getting ripped off, and let you save your hard-earned money for things you actually want to spend on.”
Nilan told Express.co.uk : “When paying with your card, or taking money out at an ATM, you’re sometimes given the option to pay either in GBP or the local currency.
“Make sure that you choose to pay in the local currency. Otherwise, the bank or card provider will charge you an unknown, possibly sky high conversion rate, on top of a foreign transaction fee.
“You’ll be able to avoid this by paying in the local currency, and will likely only need to pay a small foreign transaction fee, depending on what your card provider charges.”
Britons should always opt to pay in the local currency to avoid paying a much higher conversion fee than their card provider offers.
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Some airlines and accommodations will charge Britons in local currency but using a multi-currency card should reduce the conversion fees.
However, Britons could also be shortchanged by their card company and it’s a good idea to check exchange rates before traveling.
Nilan said: “Most banks set their own exchange rates. They take the rate you would see on Google, and apply a margin on top without telling you.
“This means you’re paying more than you should be, because of the fees that the bank has hidden in its exchange rate.
“Some fees might not seem that high, but can add up quickly, and make a real dent in your budget.”
It’s a good idea to take a multi-currency card on holidays as these will usually offer fee-free withdrawals.
Although many holiday destinations are increasingly taking payment by card rather than cash, Britons may need to use cash in some hotspots.
Nilan said: “Do your research on where to withdraw your money, to find out which ATMs or currency exchanges offer a mid-market rate (the one you see on Google), and that charges the lowest fees.
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“It may be cheapest to withdraw cash before you leave, so long as you avoid the Bureau de Change at the airport.”
Changing money at the airport is almost always very expensive, so if Britons want to take cash abroad, it’s better to arrange it before the airport.
Nilan added: “Once you arrive at your destination, the ATMs near you might all charge different fees.
“If one seems expensive, it’s worth seeing if there is another bank nearby that has an ATM that charges lower fees for taking out cash.”
ATMs may charge a fee overseas and if it seems unreasonably high, it may be a good idea to look for a different machine.
Nilan also warned Britons never to withdraw overseas money using a credit card as the fees would be high.
He added: “Make the most of tax-free shopping, as UK shoppers can now get VAT refunds on purchases made in the EU, saving up to 19 percent on the price of the item.
“You’ll need to ask for a tax refund form at the shop, which will then be validated at EU customs along with your proof of residence.”
Wise’s multi-currency card can hold over 50 currencies in an account and Britons can use it to spend and shop like a local.