You compared flights. Found the hotel. Secured the visas. And built the itinerary down to the gelato stop near the Spanish Steps, a stop at the Trevi Fountain and a visit to the Bottega Pinocchio in the centre of Rome. But before you’ve even ordered your first espresso – or the tourist traps have parted you from your money – your budget has already been dented by costs you never factored in: fees.
These hidden fees, which trip up even experienced travellers, are baked into the exchange rate at the airport, in hotel and booking platform charges, in card payments, and at every card machine that asks, “Would you like to pay in your home currency?”
June is the start of South Africa’s peak outbound travel season with the long July school holidays and northern summer offering a welcome mid-year escape from the cold. For those already committing to meaningful international travel spend, poor forex planning can add thousands of rands more than they budgeted for, simply because of how and where the currency conversion happens.
Here are five financial blind spots to watch out for:
1. The airport currency counter
The shiniest, most convenient option is often also the most expensive one.
Airport bureaux de change typically apply markups of 7% to 15% above the interbank rate, sometimes worse if you’re flying late and your options are limited. While this may apply to smaller amounts of travel cash, the same principle matters even more when larger travel-related payments are made at poor rates or left to the last minute. Using a significantly weaker exchange rate can add thousands of rands to the overall cost of an overseas trip.
It might seem like a fair trade-off for convenience, but it’s an expensive mistake.
“We often think of forex as a single transaction at the start of a trip, when really it can affect the total rand cost of travelling abroad,” says Harry Scherzer, CEO of Future Forex. “The issue is not the odd small purchase overseas. It is the larger foreign-currency payments people make before and during international travel without fully understanding the rate, margin or timing. When the amount is meaningful, even a small difference in the exchange rate can have a real impact.”
2. Your credit card’s 5%
Tapping your South African credit card abroad is convenient: You pay in a foreign currency, the money is converted, and the deal is done.
What you don’t see is a foreign transaction fee of around 2% to 3%, plus a currency conversion margin that is added to your bank’s rate. Added together, those fees can push up the cost of hotel bills, restaurant payments, transfers, activity bookings and other travel spend by roughly 4% to 5%.
It’s nominal per transaction. Across a 10-day trip with daily card use, and you could be looking at thousands of rands you didn’t budget for.
3. The “would you like to pay in rands?” trap
This is the one that catches almost everyone.
You hand your card to a waiter in Paris, or a daffodil bulb seller at Schiphol Airport. The terminal pings a friendly question: pay in EUR or in ZAR? You pick ZAR because then you know exactly what you’re paying and it feels safer.
But that dynamic currency conversion (DCC) is a tax on convenience because the merchant’s payment processor sets the exchange rate, which is usually 5% to 12% worse than what your bank would have given you. Visa and Mastercard both flag DCC as one of the most common ways travellers overpay abroad.
As a rule: always pay in the local currency.
4. Hotel surcharges and the bill in dollars
Booking accommodation through an online platform that charges in US dollars seems harmless, until you check your statement.
Your card was billed in USD, converted to ZAR by your bank, with a foreign transaction fee added on top. Even if the hotel itself prices its rooms in foreign currency, the booking platform’s choice of billing currency costs you a second conversion.
The same goes for international flights, car hire and activity bookings because each one is a conversion event that carries a surcharge.
5. Leaving foreign cash lying around
Once you return home, you have a few hundred dollars, euros or pounds left over from the trip, which you leave until next time you travel.
But years later, the money is still there, you haven’t returned as planned, and your foreign currency has lost value. Converting it back to rands costs too much, so most people just hold on to it.
Many travellers don’t realise that keeping foreign currency in a drawer isn’t just a waste of money; it actually breaches local regulations. The South African Reserve Bank requires residents to repatriate and sell back unused foreign currency within 30 days of returning from a trip. It’s a rule that’s easy to overlook, but worth knowing before that leftover cash becomes a compliance question.
It’s not complicated
“The cheapest forex strategy is the one that begins before the major payments are made,” Scherzer says. “If you know what you’ll spend, where you’ll spend it, and which payments will be made in foreign currency, you can understand the exchange rate, margin and timing upfront, instead of being pushed into expensive decisions at the moment of purchase.”
Your flights and hotels are the most visible costs of travel. The forex around them falls under the radar, which is why it pays to watch it.
