Currency Exchange: What You Use Matters

currency exchange
craigfinlay/Flickr

To International travelers, the name Travelex should sound familiar. They are the largest airport currency exchange operator in the world. But a recent currency exchange study comparing the cost of using Travelex, some of the largest U.S. banks and credit cards revealed what experts already knew.

CardHub’s 2013 Currency Exchange Study compared the cost of the currency exchange services offered by 15 of the largest banks in the U.S. as well as Visa, MasterCard and Travelex. The study proved that using a no foreign fee credit card is the way to go on spending internationally. Banks charge an average of exchange rate of 7.1% and Travelex charges 15.5%.

Worried about using a credit card outside of the U.S.? Don’t be. Credit cards also provide fraud protection for just that reason.

“Even if a consumer uses a credit card with foreign fees – the average foreign transaction fee is 2.24%, according to CardHub’s latest Credit Card Landscape Report – he’ll still save 4.86% on currency conversion relative to the services offered by banks and 13.26% compared to airport currency exchange providers,” said CardHub CEO Odysseas Papadimitriou in a HeraldOnline report.

The best banks for currency conversion? The CardHub study indicates Northern Trust and Harris Bank lead the pack as they did in the 2012 and 2011 editions of the study while U.S. Bank and SunTrust hold the bottom two spots. On average though, banks are better than Travelex, saving an average 8.4%.Still, many travelers do not feel like they are fully packed for an international trip without some local currency from the country they are visiting. They want to arrive with local cash for a cab, food or supplies they may not have been able to bring on the plane.

“It’s just one of those things that have been traditionally recommended,” says Papadimitriou. “But with the banking system becoming increasingly digital, it makes sense that the easiest way to buy things in a foreign currency is with plastic.”

Credit cards are good. No foreign fee cards are better. Still, some cash will probably be necessary along the way tipping or making purchases in places that do not take cards. With that in mind, Papadimitriou recommends a debit card with low international ATM withdrawal fees but warns travelers to avoid dynamic currency conversion, when a merchant offers to convert your purchase total from the native currency to U.S. dollars.

It might seem as though that merchant in Venice is trying to be help make sense of how much a purchase really costs, in our own currency, but “they could be looking for an excuse to apply a high exchange rate and squeeze a bit more money out of you. It’s best not to find out, especially when you can use your phone or a small pocket calculator to make quick conversions and better understand how much things cost,” says Papadimitriou.

As long as we’re talking about financial security when traveling, what about pickpockets? Well, the days of those villains are ending. In this video we see that all it takes now is a smartphone to steal your credit card information.

Electronic Pickpocketers 'Steal' Credit Cards Using NFC

Budget Travel Strategy: Smart Travel Uses For Your Tax Refund

tax refundIf a tax refund is headed your way, common recommendations include paying off debt; making a major purchase and paying cash, rather than putting it on a credit card and other assorted common sense moves. Travelers can benefit too by using some of the same thinking about what we spend on airline tickets, cruise fare, gear and more.

“Set aside some money for vacation rather than using your credit card and paying interest long after you have returned,” financial experts suggest at Kiplinger in “Ten Smart Uses for Your Tax Refund.”

Looking beyond financial guru tips that can include beginning or adding to a retirement fund, throwing much of that refund into the never ending bog of student loans, maybe some immediate feel good uses would be appropriate also.

Load up travel cards and accounts
Going to be traveling sometime this year? Load up pre-paid travel cards, perhaps a gift card received as a gift that has a few dollars left but was handy to use at the time. Starbucks cards, gas cards or hotel cards some to mind.

MasterCard’s Travel Money Cards are handy. While you have the cash, avoid worrying about it down the road, in several ways with the MasterCard version or one of a number of other cards.

Registering your pre-paid card protects travel funds in case the card is lost or stolen, with no liability, just like a credit card. Starting with a nice chunk of cash from your tax refund, then add to it between now and travel is a good way to save too.

I do this with a dedicated card that is just for my travel fund and believe me, adding to and carrying my “travel card” is a whole lot more fun than a savings account up front. On the backside, eliminate post-travel blues of a new payment to make on a credit card too.

Known Expense Buys
Thinking ahead here is the key.

If, on your last trek through the mountains, one of the last thoughts was “I’m going to need to replace this old backpack before I go again,” but travel is not happening until the fall, get ahead of the game. Buy it now and buy it wisely. Shop and compare various sources with plenty of time, looking for a sale price on the perfect gear.

That works for just about anything and even small items like socks, shoes or more of the pre-paid cards noted above are fair game also. On cruise vacations some travelers choose to pre-pay shore exploration packages, gratuities or beverage packages that can add up quickly on a cruise ship.

Looking ahead to more efficient travel and making the buy you have been putting off is a good idea too. Time for a new digital camera? Buying before the peak travel months this summer can often find lower prices on models those going on vacation are apt to buy.

Buy Now, Travel Later
Cruise lines – between wave season (the busiest booking time of the year) and summer buying season (when many travelers finally get around to booking) – have some of the best deals around right now.

  • Carnival Cruise Lines Friends And Family event, just extended through the end of the month, offer the best rates we have seen so far this year with maximum upgrades and lower fares. Often, it’s one or the other.
  • Celebrity Cruises 123 Go offer new bookers a choice of a free beverage package, free prepaid gratuities or free onboard credit if booked before April 15.
  • Princess Cruises Spring Into Savings Sale has big savings on Europe cruises and Alaska cruises and up to $100 onboard spending money and up to $500 air savings per person. Seven-day Caribbean sailings and seven-day Alaska Inside Passage sailings are also on sale.

Not just the exclusive domain of cruise vacations, other travel options like hotel packages, resort stays and prepaid expenses at destinations around the world are possible too. In Rome, for example, a taxi ride from the air or cruise port can be arranged and paid for in advance. So can tour packages separate from cruise line offerings or hotel-suggested tours, both of which have some of the cost going right back to the source that suggested it.

Beware Of Bargains
Knowing that a great many Americans get a tax refund in the second quarter of the year, sellers of travel and travel-related services feature package deals with refund-laden travelers in mind.

Many are a great value, bundling airfare with car rental and hotel, cruise or resort packages. Some are scams that lie in wait for us to receive that chunk of cash, so check with your trusted travel source or Better Business Bureau before buying.

Bonus Tip: there really is no “Royal Cruise Line.” That’s an old scam by online thieves to get “just $99” to pay the tax on your otherwise-free ride.

Some taxpayers even make spending their refund on travel an annual event. This video shows a bunch of travelers on their third annual tax refund trip.




[Photo credit – Flickr user robotson]

Mastercard to measure carbon footprints

Mastercard carbon footprintMasterCard has teamed up with environmental group Brighter Planet to offer corporate customers carbon footprint reports. By capturing and analyzing travel-related carbon emissions based on card transactions, the program hopes to help companies go green.

“Travel is a huge driver of costs and carbon emissions,” Brighter Planet CEO, Patti Prairie told Forbes. “As much as 30 or 40 percent of total operations for some companies.”

Based on “standards-compliant” calculation methodologies, the service will let companies track, compare, and report emissions metrics across organizational divisions, MasterCard said.

Brighter Planet’s software is already used by sites like Yaktrak, which allows users to plug-in a FedEx tracking number to find out how much CO2 was emitted to deliver a package.

The MasterCard application of Brighter Planet software looks at cardholder purchases such as flights, car rentals, hotel reservations the translates them into carbon dioxide emissions. Supplied with that information, businesses can manage their carbon footprint and increase sustainable practices.

The MasterCard program will automatically look at several billion calculations each year at no additional charge to customers. Those add up to $240 billion in travel-related expenses spent by U.S. businesses annually.

Flickr photo by jon smith ‘una nos lucror’

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MasterCard PriceAssure offers travelers new airfare-tracking service

Buying an airline ticket is easily one of the most confusing and costly purchases a traveler can make. There are many questions: Is the price found online the best price? Could the price go down? What does it cost to re-book the ticket if things change?

MasterCard cardholders now have a new airfare tracking tool, called PriceAssure, that may provide some assistance. What is it and should you give it a try? We investigate below.

Eligibility
Anyone with a MasterCard and a existing flight registration on any of big domestic carriers (American, Delta, United, US Airways and JetBlue were all listed when we checked) are all eligible to use the service. At this point, PriceAssure doesn’t cover international airfares.

How it Works
To start, new users need to enroll in the program by providing their basic MasterCard card details, name and an account login. After login, users have a couple options: The first is to input an existing flight itinerary and the price paid for the ticket. Gadling Labs tried out an upcoming flight that we’re taking on American Airlines from LaGuardia to O’Hare.

Once the flights are in the system, PriceAssure goes to work. It constantly monitors the current fare on your airline for the chosen dates. Should that price fall below the price you originally paid for your ticket, PriceAssure sends out an email, letting you know that you may be eligible for a refund. Interestingly enough, PriceAssure also incorporates any potential change fee you might have pay as part of the new re-booking price.

All of this, mind you, is based on the type of ticket that you have booked and what the rules are for changing that ticket (and the fees therein). If one is booked on a heavily discounted ticket with high change fees, for example, a $20 fare drop won’t account for the $150 in change fees so a refund is moot. But for a more flexible ticket or a larger price drop, the service is particularly handy.

Once you discover you’re eligible for a refund, MasterCard also offers to call up the airline for you to negotiate your refund for $19.95. You can make the call yourself for no additional charge (though the hold time and haggling with the customer service rep is up to you).
Our Take
With all the variables involved in booking airfare these days, any solution that claims to simplify the process is already a thumbs up in our book. That said, PriceAssure is likely to work best for certain certain types of travelers more than others.

If you’re a budget traveler, chances are you’re already buying heavily discounted airfares and the likelihood your fare will fall enough to save you more money is slim. Even if the price on your flight does fall, it’s not likely to be enough to offset the often hefty airline change fees attached to most deep discount tickets.

Business travelers, however, play a different game. Many of these passengers book more flexible, high-cost airfares, and for these itineraries, PriceAssure will prove quite useful. Take a test drive of the application over at priceassure.mastercard.com