Travelers lose over 5,000 bucks a lifetime to this pitfall…

If you’ve ever been to the airport, you’ve undoubtedly seen one of those big inviting currency desks, right in the middle of the action, and if you’ve been to one – you’ve almost undoubtedly been ripped off, losing out on money. Even with gigantic, comforting signs proclaiming “no fee, best rates or zero commission” travelers aren’t getting the real story when it comes to taking out foreign currency. Here’s how to ensure you always get the best rate for your currency exchanges, while avoiding all the most common travel pitfalls.

Rates Of Foreign Currency Exchange

Telling customers “no fee exchange or 0% commission” is just a way to distract travelers from what really matters: the actual rate of exchange. For the most part, there are two different rates in the world: the commercial rate and the bank rate. These rates can differ by 10% or more, so whereas one will offer 1.25 dollars for every Euro you exchange, the other may only offer a mere 1.13. That’s more than 10 cents per dollar – wasted! Airport currency exchange desks and those found in major cities typically are the worst, offering a commercial rate of exchange with inferior conversion rates, compared to bank (market) rates of exchange. Yes, you read that right. The airport is often the very worst place to exchange money for foreign currency. Even though they say catchy things like “no fee” or “amazing rates”, they’re not.

How To Avoid Commercial Rates

Always do the math first. Using low fee debit cards abroad, such as Revolut can save substantial money versus an airport or high street money exchange desk. Virtually all debit card transactions offer competitive “bank rates” of exchange, so even if a withdrawal fee is charged to you, you’ll likely still save money, especially when making one large withdrawal. Just watch out for ATM’s abroad with low withdrawal limits, before making a transaction! Companies such as fx.com and transferwise.com offer free, brilliant guides to the best going rates for each currency – and also which bank offers the most competitive rates for customers. Good to know, right? Of course if you’re afraid of landing without any local currency, just go directly to your bank at least a week before travel to request foreign bills. And with the world going cashless, more and more credit cards offer no foreign transaction fees.

Inside Bank Rate Of Exchange

And if you want to take it to the next level, some banks offer better banking rates than others. While almost every bank rate of currency exchange is better than a commercial rate, some banks are far better than others. The BBC and Transferwise recently revealed that some banks will offer rates which can save over $40 per $1000 in foreign currency over competitors. You can view the currency best list here. Long story short: use fx.com, use transferwise.com and be sure to avoid most foreign currency businesses in airports and cities, since they’ll rip you off for as much as 10 cents on the dollar, even if they say there’s no fee. Hey, It’s your money…

Have you gotten ripped off taking out foreign cash?