Key facts from this guide
- The majority of Brits only go abroad once per year [54%], with just over a quarter [27%] able to enjoy two overseas holidays per annum.
- A fifth of Brits commonly purchase their foreign currency from their local travel agent, with just 4% making use of foreign currency cards.
- Most Brits [32%] spend up to £1,000 per year when abroad, with 14% spending up to £1,500 and 12% up to £2,000.
Only 18% of Brits use the most efficient way to purchase foreign currency, via online order or by using a foreign currency card, according to new research by cost comparison site, Quote Goat.
The research, which surveyed 1,000 participants between the ages of 18 – 65 on their understanding of foreign currency, also revealed a massive 3 in 4 people are completely unaware as to what the most cost-effective or cheapest method is, when it comes to purchasing foreign tender.
When using UK bank cards overseas and presented with the option to pay in GBP or the visiting country’s currency, an alarming 50% of Brits either don’t know which currency to choose or incorrectly select GBP, facing additional dynamic currency conversion [DCC] charges of 6 – 10%.
With ABTA revealing £31.6bn* is spent by UK holiday makers each year, this implies that a massive £132 Million is needlessly spent per annum on DCC charges by UK holiday makers, calculated by the 14% who confirm they use their bank card overseas.
Michael Foote, Managing Director of Quote Goat, commented: “This latest research highlights that just under a fifth of Brits are shopping savvy when it comes to purchasing foreign currency, with only 4% aware of the benefits of foreign currency cards.”
“There is also an evident lack of understanding in how best to use bank cards when purchasing goods or services overseas. The best option is to select the visiting countries currency and let your own bank handle the conversion as they are almost always cheaper.”
“The DCC (dynamic currency conversion) is not subject to a cap on the amount charged, however rules state that the customer has to be given the option to select which currency to use, so be sure that the retailer is not automatically selecting GBP for your payment.”
“Ultimately, the best option is use a currency card or pre-order your Euros online to get the best rates.”
Other key take outs from the research include:
- The majority of Brits only go abroad once per year [54%], with just over a quarter [27%] able to enjoy two overseas holidays per annum.
- Just over a quarter of Brits believe that the Post Office is the cheapest place to purchase foreign currency.
- A fifth of Brits commonly purchase their foreign currency from their local travel agent, with just 4% making use of foreign currency cards.
- Most Brits [32%] spend up to £1,000 per year when abroad, with 14% spending up to £1,500 and 12% up to £2,000.
Frequently asked questions
What is the most efficient way to buy foreign currency?
Ordering online or using a foreign currency card, according to Quote Goat research. Only 18% of Brits use these methods, and 3 in 4 people do not know which method is cheapest.
Should I pay in pounds or local currency when abroad?
Select the local currency and let your own bank handle the conversion. Choosing GBP triggers dynamic currency conversion charges of 6 to 10%, and 50% of Brits either do not know which to pick or wrongly choose GBP.
What is dynamic currency conversion?
It is the conversion applied when you pay in GBP rather than the local currency on an overseas card payment. It is not subject to a cap, but rules state the customer must be given the choice of currency, so check the retailer is not automatically selecting GBP.
How much do UK holidaymakers lose to currency conversion charges?
The research estimates around £132 million a year is needlessly spent on DCC charges, based on ABTA's £31.6bn annual UK holiday spend and the 14% who use their bank card overseas.
Where do most Brits buy their holiday money?
Just over a quarter believe the Post Office is the cheapest place, a fifth commonly buy from their local travel agent, and only 4% use foreign currency cards.
Michael Foote, Insurance & Finance Expert
Michael Foote is the founder of Quote Goat and has over 20 years experience working in finance & insurance. Since launching Quote Goat he has appeared on TV as well as many of the largest online publications including Forbes, The Telegraph and The Metro. Prior to Quote Goat, he worked in finance in the city.
