With the peak summer travel season in full swing, many Brits are heading off to popular European hotspots where cash is still king, essential for tipping, taxi rides, or market haggling. But while sunseekers are focused on beach days and sightseeing, a simple misstep at the ATM could end up costing them far more than expected.
Travel experts are now warning holidaymakers to be especially cautious when withdrawing money overseas, particularly when faced with one seemingly helpful option at the cash machine. Known as Dynamic Currency Conversion, this option appears to offer clarity by displaying the exact amount you’ll be charged in sterling. However, experts insist it’s a trap that could see tourists losing out on far better exchange rates.
Hadleigh Diamond, Commercial Director at luxury transfer service SCS Chauffeurs, says the difference can be significant.
According to Diamond, choosing to convert your cash withdrawal into pounds at the point of transaction often means being hit with poor exchange rates and additional hidden fees.
Opting instead to withdraw in the local currency ensures your home bank, not the ATM operator, handles the conversion, usually at a fairer rate.
It’s not just the button on the screen that matters.
Where you withdraw money also plays a major role. Many travellers make the mistake of heading straight for the nearest cash machine at the airport or in tourist-heavy areas.
These machines are frequently run by third-party operators rather than established banks, meaning higher withdrawal charges and worse rates.
Diamond recommends using Google Maps to search for “Bank ATM” upon arrival. This small step can direct you to machines owned by reputable banks like Santander, HSBC or ING, which typically charge lower fees and offer better exchange rates.
These bank-operated ATMs are also more likely to be located in secure, discreet areas with CCTV and less foot traffic, offering added peace of mind for travellers wary of withdrawing large sums.
Diamond notes that travellers often prepare meticulously for flight delays, lost baggage, or hotel check-ins but forget the simple act of withdrawing money.
He suggests that if your transfer driver is meeting you at the airport, ask them to stop by a proper bank ATM en route to your accommodation. It’s a small detour that can result in big savings.
Another common pitfall is frequent small withdrawals, which rack up fees every time. Instead, it’s more economical to withdraw a larger amount once and store it securely, rather than making multiple trips to the ATM.
While many travellers are now wise to currency exchange fees at bureaux de change, the hidden costs of ATM withdrawals still catch people off guard.
Avoiding the conversion trap and choosing the right machine could save hundreds over the course of a single trip.