Al Qalam Correspondent
The pace of technological advancement in the financial sector has changed peoples’ lives, generally for the better, but may also be regarded as something of a Sword of Damocles when it comes to travel and overseas spending.
The big dilemma facing every traveller today is whether to use a bank card or purchase foreign exchange.
“There are advantages and disadvantages associated with both approaches,” maintains Mohammed Kaka, Al Baraka Bank’s Chief Operating Officer.
Responsible for overseeing the bank’s foreign exchange dealings, Kaka said: “The obvious advantage of using a card is security and not having to worry about cash being stolen in a foreign country. A negative, however, is the risk of card cloning. If you have a chip card that risk is, however, fairly well mitigated.”
“More importantly, the concern about using a bank card overseas revolves around the South African Rand’s volatility. Few travellers are likely at the time of making a purchase to have an accurate assessment of where the Rand is trading against the currency of the country they are visiting. This is, of course, exacerbated by the hidden cross conversion, which can total approximately 4%. That’s 60c for every US Dollar paid for,” he said.
Adding to holiday costs are the charges that one’s bank levies to keep the traveller safe overseas, which could amount to an additional 2% in charges.
Kaka said: “Another important fact that many forget amidst the euphoria of an overseas trip is that by using a credit card, they will still be paying for their holiday long after it has become a distant memory. It’s all too easy to spend more excessively when you have plastic in your hand than you would in counting out cash from your budget to make purchases.”
“Better, then, to have a set amount available for spending on your trip, putting aside technology in favour of purchasing good old-fashioned cash before you embark on your trip. You can then enjoy the overseas experience without having to worry about exchange rate fluctuations and living in debt until your lavish overseas spending has been covered,” he advised.