Money dos and don’ts when travelling this summer

It may be one of the more mundane aspects of travelling but, as no one wants to waste money on unnecessary fees and charges, doing a little bit of research before you set off on your summer holidays can pay dividends.

If you are travelling outside the euro zone and don’t have a plan in place, you could end up paying upwards of €15 per transaction – something that would translate into a nasty surprise when you check your bank balance after you get home.

So, to avoid that, here are some dos and don’ts for watching your money this summer.

If you’re travelling to one of the 20 countries that use the euro this summer, how you bring your money – and what kind of charges you might incur – won’t be too much of a concern.

Typically, Irish banks will apply the same charges in the euro zone as they do at home. As a spokesman for Bank of Ireland says: “There are no additional BOI charges” in this region, which means that debit card purchases/ATM withdrawals will be treated the same as at home. This means, for example, that if you’re a Revolut user, you may face a charge if you go over your limit or, if you are an AIB customer, the 35 cent ATM charge will apply.

While withdrawals from an ATM should otherwise be free, beware of some ATMs in other countries that impose their own charges.

Things get a bit trickier, however, when travelling outside the euro zone as many of the traditional banks impose pretty hefty fees on non-euro debit card payments. As our table shows, paying for a bill worth €500 in the US with your debit card, for example, will cost as much as €15 with An Post, or €10 with Bank of Ireland.

A better option in that situation might be Revolut. On a standard plan, you won’t pay FX charges but once your spending exceeds €1,000, you will be hit with an FX fee of 1 per cent per transaction, so €5 on a €500 purchase.

ATMs

While we can now pay for most of our daily expenses through our card or phone, remember that not everywhere is as digitally friendly as Ireland. In France for example, many cafes and shops in smaller towns and villages will still ask for cash.

As mentioned, this won’t be a problem if travelling in the euro zone, as you can simply withdraw your money at the local ATM if you haven’t brought enough with you. Further afield though, withdrawing cash can be an expensive exercise.

Revolut might look like a better option but make sure you read the small print first

With Bank of Ireland for example, if you wish to withdraw sterling from a UK ATM, you’ll pay a charge of 3.5 per cent of the amount you withdraw – so €3.50 on a €100 withdrawal – up to a maximum charge of €11.43. The charge is even higher with An Post, at 90 cent plus 3 per cent of the amount you wish to withdraw.

Revolut might look like a better option but make sure you read the small print first. For example, on a comparison site like itsyourmoney.ie, it will show that ATM withdrawals have no charge outside the euro zone. This is only true in certain circumstances, however. As our table shows, withdrawing €500 will typically cost between €6-€15, depending on the Revolut plan you are on and when you make the withdrawal (weekends are more expensive).

In addition, watch out for ATM-specific charges. In the UK for example, most ATMs should be free (at least before your own bank’s charges), but some charge a fee of between £1.50 and £2. You will be notified of this before you execute the transaction and you don’t have to accept the fee. Last year, Britain made access to fee-free cash machines a legal right, which means you should always be within 5km of a free machine.

In the US, ATMs often have fees, of about $2-$3 per transaction which can be difficult to avoid.

Pre-funding

It’s an oldie but a goody; keeping your card in credit by pre-funding it with money you intend spending while on holiday can help keep the costs of using it down. This is particularly true when travelling outside the euro zone.

Otherwise, credit cards are one of the most expensive ways of withdrawing money. Taking out the equivalent of €500 in the US, for example, will cost you more than €20 with AIB.

You can bring that AIB transaction down to €13.75 if your card is in credit, as this means you will avoid the withdrawal charges though not the currency conversion ones. You can also avoid cash advance charges with Bank of Ireland by keeping the card in credit.

An Post allows you to carry 15 different currencies on one card, which means that you can avoid currency conversion charges when withdrawing money or paying for something

If you’re going to do this, check with your credit card provider first to ensure you get the reduced fee. A spokesman for AIB for example says that pre-funding doesn’t work on its Click and Be credit cards.

The other option is to get your money changed to the local currency before you go. But if you leave it until the last minute, you could end up paying above the odds.

At Dublin Airport for example, ICE has a number of currency exchange booths across the airport, which is convenient as you can order what you want before heading off, and pick it up once you reach the airport. If you opt for this click-and-collect service, you won’t be charged a commission – but you’ll find that the rates aren’t as attractive as elsewhere.

On May 21st, at about midday, wholesale rates for euro were $1.08674 and £0.85536, according to Oanda.com. But you would have been offered considerably less than this at Dublin Airport, where one euro would buy you $1.018506 or £0.804373 – about 6 per cent less at the ICE branch.

With Bank of Ireland, you would have done a bit better, at $1.0535 and £0.8285, while AIB offered $1.06, or £0.83.

Remember, that commission will also likely apply. At AIB, you’ll pay a charge of between €1.27 – €6.35, (1 per cent) and its service is only open to account holders. At Bank of Ireland, commission is also 1 per cent, up to a maximum of €6.35.

[  How a rail pass could be just the ticket for cheap travel across Europe for all ages ]

If you already qualify for free banking because you are aged 66 or over, your best bet might be to exchange cash at your local branch before you head off. This is because with AIB and Bank of Ireland (up to €2,000), you won’t pay commission on the exchange. But, as AIB notes, card transactions will attract “the normal foreign exchange charges, commissions and scheme fees”. This also applies at Bank of Ireland.

And don’t just turn up expecting your branch to have the particular currency of your destination. As the spokesman for Bank of Ireland says, “we recommend that all FX currencies are ordered in advance to avoid disappointment”.

Currency cards

You may do better with a currency card or a card like Revolut when travelling outside the euro zone. A prepaid currency card is one way to lock into potentially better exchange rates, and offers you the certainty of “bringing” local currency with you – a bit like travellers’ cheques of older days.

An Post allows you to carry 15 different currencies on one card, which means that you can avoid currency conversion charges when withdrawing money or paying for something. Once the card is funded, you won’t pay commission charges on withdrawing funds or paying for something in your chosen currency. Of course, this means that you’re likely paying a bit of a mark-up when it comes to exchange rates – but the big advantage is certainty for you, and fewer currency costs.

Another option is Wise’s international debit card, which allows you to fund the card with up to 40 different currencies. Wise is a Belgian payments group and is authorised by the National Bank of Belgium.

While it does charge a fee – a fixed fee of 98 cent plus 0.52 per cent on euro to sterling for example – it does offer attractive conversion rates. While An Post will use the Mastercard rate, Wise says it uses the “mid-market” rate, which is the midpoint between the buy and sell prices of a currency, and is typically more attractive.

The Wise card costs €7 – but you won’t pay stamp duty on it. You can also get up to three digital cards for free. With An Post’s card, you’ll pay up to €5 a year in stamp duty (12 cent per ATM transaction).

You can also use the Wise card at the ATM. No fees apply on withdrawals of up to €200 a month: thereafter it’s 50 cent per withdrawal, plus 1.75 per cent of the amount.