- Travellers Risk Losing Up To 12% By Paying in Dollars Abroad — Achieve
Travellers could reduce the cost of overseas holidays by paying in local currencies, monitoring hotel prices after booking and using cash for everyday purchases, according to personal finance company Achieve.
The recommendations come as the average American is estimated to spend about US$3,900 per person on a single trip, placing greater pressure on households to control accommodation, payment and insurance costs.
Achieve’s experts identified five measures that could help travellers avoid unnecessary charges and reduce their exposure to unexpected expenses.
Travellers using a card or withdrawing money abroad are frequently asked whether they want the transaction processed in their home currency or the currency of the country they are visiting.
Selecting the home-currency option activates a service known as dynamic currency conversion. While it immediately displays the cost in a familiar currency, the exchange rate and associated fees can be less favourable than those offered by the traveller’s bank.
Achieve estimates that declining the conversion and paying in the local currency could save between 3 and 12 per cent on each transaction.
“Your own bank converts at a better rate than the shop terminal,” an Achieve financial expert said. “The same screen will be at the ATM, and your answer should be the same.”
The expert said the apparent convenience of seeing the price in dollars frequently persuaded travellers to accept the more expensive option.
“The dollar figure looks helpful, and around 60 per cent of customers choose it, but also lose money because of this,” the expert said.
Travellers should still check the foreign-transaction and withdrawal fees charged by their banks before departing, since paying in the local currency does not necessarily eliminate all charges.
Achieve also recommends selecting accommodation that offers free cancellation.
Flexible reservations protect travellers from losing money when emergencies or changes in their plans force them to cancel. They can also provide an opportunity to benefit when room prices fall after the initial booking.
Travellers can check the same hotel one or two weeks later. If the price has declined, they can make a new reservation at the lower rate before cancelling the original booking.
The strategy could save between US$60 and US$120 per reservation, according to Achieve.
It works best when the traveller carefully reviews the cancellation deadline, room type, taxes and other conditions to ensure that the new booking is genuinely cheaper and that the original reservation can be cancelled without a penalty.
The timing of travel-insurance purchases can determine the scope of protection available.
Achieve said travellers with pre-existing medical conditions may qualify for certain waivers or coverage only when they purchase insurance within a specified period after making their first trip deposit.
“Timing actually changes what you’re buying,” its expert said.
“If a traveller has a pre-existing condition, it’s covered only if the insurance was bought within 14 to 21 days of the first deposit.”
Travellers should search the policy for the phrase “time-sensitive period” and confirm the precise deadline because conditions differ among insurers.
Insurance does not necessarily produce a direct saving. Its value lies in reducing exposure to losses that could range from US$20,000 to US$200,000 when travellers require emergency medical care, evacuation or other expensive assistance abroad.
Digital payments can make spending faster, but the convenience may also weaken a traveller’s awareness of how much is being spent.
Research involving more than 11,000 participants found that consumer spending increased by about 9.4 per cent after the adoption of mobile payments, according to figures cited by Achieve.
The company argues that travellers could reduce daily spending by roughly 9 to 10 per cent by setting a fixed cash allowance for meals, drinks, transport and minor purchases.
The approach is less about rejecting cards completely than making discretionary expenditure more visible. Physically seeing cash decline can impose a limit that repeated taps of a phone or card may not.
Travellers should nevertheless avoid carrying large amounts of money and consider security, local payment practices and the cost of ATM withdrawals.
University rooms can offer a cheaper alternative to hotels during academic breaks.
More than 400 universities and colleges reportedly make rooms available to non-students, with nightly prices ranging from about US$25 to US$75.
“There are over 400 universities and colleges that list rooms for non-students,” the Achieve expert said.
“The catch is that this is seasonal: January and June to July are usually the safest bets. Many stays even include breakfast or dining hall access.”
University accommodation may not provide the services or comfort associated with a conventional hotel. But for budget-conscious travellers who prioritise location and affordability, it could significantly reduce one of the largest components of holiday expenditure.
The five recommendations share a common principle: travellers can cut costs by making small decisions before and during a trip rather than relying exclusively on finding a cheaper destination.
As airfares, accommodation and daily expenses rise, the difference between an affordable holiday and an expensive one may increasingly depend on the currency selected at a payment terminal, the terms attached to a hotel booking and the timing of an insurance purchase.
