Arranging your finances before embarking on your summer break can be a tremendous bore, however, putting in a little groundwork beforehand could save you from squandering money on needless charges and fees. If you’re planning to journey outside the euro zone and haven’t got a strategy set, you might find yourself billed over €15 per transaction, resulting in a shocking discovery when you view your bank statement upon your return.
Here are some pointers to help you manage your expenses for the forthcoming summer. If your destination is amongst the 20 nations that utilise the euro, fretting about potential fees linked to your money isn’t really necessary. Generally, Irish banks will levy the same charges within the euro zone as they do domestically. When communalised by a Bank of Ireland representative: “Extra BOI charges do not apply” in these areas. Which implies debit card expenses or ATM withdrawals will bear the same conditions as they do locally.
However, ensure you steer clear of certain ATM’s in different nations that levy their independent charges, although most ATM withdrawals should be free. But, the scenario alters when venturing outside the euro zone, as conventional banks tend to slap on sizable charges on non-euro debit card payments. For illustration, incurring a bill of €500 in the US with your debit card could cost up to €15 with An Post or €10 with the Bank of Ireland according to our data.
Revolut could potentially be a more viable option in such circumstances. With a standard plan, you’re exempt from foreign exchange charges but once your expenditure surpasses €1,000, a 1% foreign exchange fee will apply to each transaction, translating to €5 on a €500 purchase.
While most everyday expenses can be covered by card or phone, it’s important to note that not all locations are as technologically advanced as Ireland. For instance, many cafes and stores in smaller French towns still prefer cash payments.
It was previously stated that when travelling within the euro zone, lack of cash isn’t an issue as you can easily withdraw money from a local cash machine. However, it can be a costly affair to pull out money when you’re outside of the euro zone.
You might perceive Revolut as a more preferable choice, but it’s wise to fully comprehend the terms and conditions beforehand. For instance, according to a comparison website like itsyourmoney.ie, Revolut seemingly offers no-charge cash withdrawals outside the euro zone, which is only valid under specific conditions. To illustrate, an extraction of €500 would generally set you back anywhere between €6-€15, reliant on your type of Revolut plan and the timing of the withdrawal – weekend rates are usually steeper.
Consider also any ATM-specific charges. Most UK cash machines should be chargeless (prior to your bank’s fees), yet some may impose a fee between £1.50 and £2. Keep in mind that this fee is optional as you’ll be informed beforehand and can choose to decline. Furthermore, the UK has legally ensured availability of cost-free ATMs, thus a free machine should always be within a 5km radius.
On the contrary, in the US, ATM fees are common, typically around $2-$3 per transaction and are nearly unavoidable.
An old yet handy tip is pre-funding your card with the amount of money you plan to expend on your trip – a good method of keeping expenses on the lower end, especially when travelling outside the euro zone.
Lastly, using credit cards for cash withdrawals can be an expensive option. As an example, drawing out an amount equivalent to €500 in the US using an AIB credit card could cost upwards of €20.
Using a credit balance on your AIB card can reduce transaction costs to €13.75. This method bypasses withdrawal fees, though you’ll still be subject to currency conversion fees. Staying in credit with the Bank of Ireland also avoids cash advancement charges.
An alternative from An Post is a multi-currency card where up to 15 currencies can be stored, eliminating conversion fees when making payments or withdrawing funds. Should you consider this, it’s advisable to consult your credit card provider to secure a lower fee. Be aware, certain providers like AIB state that pre-funding is not an option with some of their cards, such as the Click and Be credit cards.
Another choice is to exchange your money into the local currency prior to your departure. However, last-minute exchanges may result in unpreferable rates. Utilising currency exchange stands at places like Dublin Airport, such as those managed by ICE, can be practical – order your required currency before you leave and collect it upon arrival at the airport. This click-and-collect scheme does not include a commission, although their exchange rates are generally not as competitive.
As an example, on May 21st, around noon, Oanda.com reported wholesale rates for the Euro at $1.08674 and £0.85536. At Dublin Airport, ICE offered significantly lower rates, where one Euro could buy $1.018506 or £0.804373, roughly 6% less. Given the same circumstances, Bank of Ireland’s rates would have been slightly better at $1.0535 and £0.8285, whilst AIB’s rate was $1.06 or £0.83.
Remember that commissions are often applicable. In the case of AIB, they charged between €1.27 to €6.35 (1%), only for account holders, and Bank of Ireland also applied a 1% commission, up to €6.35.
If you already meet the requirements for complimentary banking due to being 66 years old or beyond, a good strategy could be to exchange your money at your local branch prior to setting out. This works well with both AIB and Bank of Ireland (up to a level of €2,000) as they don’t impose a commission charge on such transactions. However, AIB reminds customers that standard foreign exchange charges, commissions and scheme fees will be applied to card transactions. The same conditions apply to Bank of Ireland.
Furthermore, don’t assume that your branch will automatically stock the specific currency linked to your travel destination. According to Bank of Ireland’s spokesperson, it’s advisable that all foreign currencies are requested ahead of time to prevent last-minute setbacks.
Currency Cards
Opting for a currency card or similar products like Revolut, may be more beneficial when planning to travel outside areas that do not use the euro. A prepaid currency card is a reliable way to secure favourable exchange rates, and ensures that local currency can be ‘carried’ along – an analogy akin to the travellers’ cheques of yesteryears.
An Post offers the advantage of accommodating 15 different currencies in a single card, assisting you in evading currency conversion expenses when buying goods or drawing out cash. Once the card balance is replenished, the associated commissions for withdrawals or purchases in your chosen currency are eliminated. Evidently, this might mean a slight increase in exchange rates, but the upside is a sense of security and minimised currency-related costs.
Another alternative comes in the form of Wise’s international debit card that is capable of storing funds in up to 40 diverse currencies. Wise, a Belgian payment firm authorised by the National Bank of Belgium, does levy a charge – a fixed fee of 98 cent plus 0.52 per cent when converting euros to sterling – but it compensates with favourable conversion rates. Whereas An Post utilises the Mastercard rate, Wise operates on the “mid-market” rate, historically found to be better as it represents the median between currency buy and sell prices.
The Wise card comes with an initial cost of €7, but is exempt from stamp duty. Up to three digital cards can be obtained at no additional cost. Conversely, with An Post’s card, annual stamp duty charges can reach €5 (12 cent per ATM transaction).
Utilising the Wise card is an option at cash machines as well. There will be no charges levied on cash outs of up to €200 in a month. After this limit, every cash out will be subject to a surcharge of 50 pence, with an additional 1.75% of the total sum.