By Alison Massey | 28 Aug 2012

Why expats lose out on travel money and how to avoid the common pitfalls

Guest post by: Daniel Abrahams


Guest post by: Daniel Abrahams MD of

As an expat, you will no doubt be travelling between your home and host country regularly. Whether you are going for a family wedding, christening or simply yearly holidays to see the relatives, you represent a band of people that are amongst the world's most seasoned travellers. Clearly, this comes at a price and exchanging currency will become very common, and often expensive.


With this in mind, we have once again teamed up with Daniel Abrahams, Managing Director of market leading foreign exchange comparison sites In this quick and easy to read guide, we'll show you how to get the best deal on travel money and highlight some of the common advertising strategies suppliers use to bump up the price of a currency purchase. By the end of the article, we'll make sure you are travel money guru!

Fact: Cheap Travel Money Deals Are Out There

In a perfect world, the roving expat should be able to quickly, conveniently, and most importantly cheaply convert currencies at competitive exchange rates. Buying travel money may appear relatively simple: turn up to an airport bureau or bank, accept a rate on the screen and buy the amount you need. But the system is frequently misunderstood, and gaining a full understanding can help you to save anything up to 10% of the value of your purchase.

Mistake #1 - Don't be fooled by currency converters

You will never get the rate you see in newspapers and online currency converters. This is the mid-market rate (or the "˜real exchange rate'), which represents the rate that banks who buy currency from one another in the billions. What you will receive is often called the "tourist rate", which is the mid-market rate with a profit margin applied by the currency supplier. This margin is applied by all currency providers, but can varies significantly.

It is still very important to keep an eye on the mid-market rate, as this should be your benchmark against the "˜tourist rate' on offer. If the difference is vast, you know you are getting a raw deal. The closer the rate on offer is to the mid-market rate, the better the deal. As a general rule of thumb, specialist online providers usually provide better rates than banks or retail location bureaus.

Pro tip: Check whether any suppliers in your home or host country offer you to buy currency online. These providers will often beat bricks and mortar stores by up to 10%. It is very expensive to run a bureau, particularly at airport locations. As such, the best rates can typically be found online.

Myth #2 - Nothing in life is free: the 0% commission problem

Of course, providers do not like to highlight the fact they are charging extra. A classic but incorrect assumption by many consumers is that money is money, and you should be able to exchange, for example, dollars for euros without it costing anything.
Foreign currency exchangers like to reinforce this, often claiming they are giving away the foreign currency for free by offering 0% or free commission. While this sounds great, it's relatively meaningless as what distinguishes a good or bad deal is within the rate of exchange.

Daniel's Top Tips for getting the best deal on travel money

It is easy to compare exchange rates and only takes a couple minutes! This could save you 10-15% of the value of your purchase. Here are some top tips to help locate the best rates for you:

  • A good exchange rate will be within 2-3 % of the "˜real exchange rate' i.e. the mid-market rate.
  • Rates constantly vary - look online a month before you travel, and don't be afraid to order currency early if the rate is good - it will also save you the hassle of finding currency at the last minute.
  • Loud and frequent reminders of 0% commission tend to hide a poor exchange rate. Remember, this is relatively meaningless
  • Online is generally the best place to exchange currency. Avoid airport bureaux de change at all costs - they know you are desperate and will charge extortionate rates of exchange. 
  • Ordering online in advance usually allows delivery to your home, saving you the hassle of making two trips to a bank to order and receive your currency.

We hope you now have a clearer picture on how to get a better and fairer deal on travel money. From the whole team at , we wish you the best of luck on buying currency and safe travels.

Daniel Abrahams