the dangerous freelancing of exchange fees for your holiday budget

The holidays are fast approaching. And if you have planned to leave outside the euro zone, the question of currencies arises sooner or later. Should I exchange money before leaving or withdraw money once there? And where to find the most advantageous exchange rates?

Before going abroad, you can exchange your euros for foreign currencies with your banker. Most of the time, the bank does not hold the cash in question. But your personal adviser can order them from a wholesaler on request from you, in which case your tickets will be ready within a few days.

However, this service comes at a price. The Caisse d’Epargne Ile-de-France, for example, takes 3% of the sum changes, with a minimum of 5 euros. These costs can increase further if you use a bank of which you are not a customer. Societe Generale invoices as 1.5% fees, with a minimum of 6 eurosto which are added 9.90 euros fixed fees for non-customers.

Another downside: some banks apply a house exchange rateoften higher than the official price, which can generate hidden fees for their customers. On average, these costs represent 3 5% of the transaction, says Julie Arnoux, commercial director of Wise, a fintech specialist in international money transfers.

Strong disparities

Result? To lighten the bill, it is better to turn to a exchange office. Less expensive in terms of costs, these players are most often satisfied with a commission of 1 2%. That said, not all are created equal. And from one establishment to another, there are significant disparities.

According to the bureau-change.fr site, which allows compare offers independent forex traders, you will thus receive 995 american dollars for 1000euros exchanged through the forex trader Arcades Change, located in Paris, against $961.60 by Global Cash, bas Lyon, or 3.36% of gap.

The difference is even greater for certain currency pairs, more rarely requested: if you change 1000 euros into Israeli shekels, you will get NIS 3410 at Arcades Change, but only 3115.4 shekels at Global Cash, or 8.64% of gap.

Before exchanging your euros for foreign currencies, take the time to compare offers available. And as far as possible, avoid exchange offices in the immediate vicinity of airports: they are systematically more expensive than establishments located in the city centre.

If you have found an interesting exchange rate on the internet, preferably call the exchange office to order your currencies at the rate indicated onlinebecause the rates applied in stores are often less advantageous.

Also remember to compare the services offered. For example, some exchange offices offer a cash back service. If you have any currency left when you return from your trip, they undertake to buy it back from you at the exchange rate at which they gave it to you. Others offer to deliver your currencies home, to avoid having to go to the store. But this service often comes with additional costs.

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The decline of currency traders

For several years, the number of exchange offices has been steadily decreasing in France. The Banque de France identified 828 manual changers approved in 2001. Nearly 20 years later, they are no more than 177. In question: the passage to the euro, then the pandemic. But also the rise in power of multi-currency accountssuch as Revolut, N26 and Wise.

Outside the euro area, customers of traditional banks pay on average 5.58 euros for a withdrawal of 100 euros. It is therefore in their best interest to change currencies before leaving to limit the bill.

That said, not everyone is housed in the same boat. And more and more operators are offering accounts with little or no cost abroad. The N26 nobank, with its N26 You formulas (9.90 euros per month) and N26 Metal (16.90 euros per month), offers, for example, unlimited currency withdrawals at no additional cost. It also applies the Mastercard real exchange rate to your foreign currency transactions, without any markup.

Online banks have also drastically reduced their fees for withdrawals outside the euro zone. Boursorama Banque offers, for example, 3 free withdrawals in foreign currency per month with their Ultim card, then 1.69% of the amount withdrawn beyond. Same story with Fortuneo, where holders of a Mastercard Gold or a World Elite Mastercard do not pay no charges on foreign transactions. If you are a customer of these banks, it is therefore better to withdraw money once there.

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Watch out for rates

Even if your bank does not charge any fees, caution is still required. Vacationers should pay particular attention when withdrawing money from ATMs, warns Julie Arnoux. And for good reason: ATM operators often have their own exchange rate. They apply high margins and thus earn money with each withdrawal, continues Julie Arnoux.

And the bill is sometimes dirty. In Australia, Wise found that with a withdrawal equivalent to 100 euros, the increase in the exchange rate results in a difference of 6.30 euros against the average exchange rate. This surcharge reaches 5.86 euros in the United States and 4.82 euros in New Zealand. Almost invisible commissions, since ATMs do not always indicate the exchange rate used. Only the consultation of the statement of account allows to have this information, specifies Julie Arnoux.

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Travel without cash

Last option available to you: pay for your purchases by credit card. But if the bank card has become ubiquitous in France, it is not the same in all countries of the world. Although the trend is towards payment by credit card, anyone who travels a lot abroad knows that it is often difficult to avoid the use of cash. It depends on the payment options available in the country, confirms Julie Arnoux.

Not to mention that card payments outside the euro zone are not always free. Far from it. La Banque Postale takes, for example, 2.30% the amount of each payment in foreign currency, with a ceiling 6 euros by operation. Worse: some banks also apply fixed costs. This is notably the case of the LCL bank, which invoices 2.85% and 1.20 euros each operation. As a result, your bill can quickly skyrocket if you multiply small payments.

Several banks, on the other hand, offer the free payments abroad. This is for example the case of mobile banks N26 and Revolut. But also from certain online banks, such as Boursorama Banque, Fortuneo or even Orange Bank, with its Premium card. If so, pay by card as soon as you have the opportunity.

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