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UK consumers and businesses to save around £2.7 billion a year as Sterling rises against the Euro

New analysis from travel money business Centtrip reveals that sterling is now worth around 13.8% more against the Euro than it was this time in 2013, and it estimates this could save the nation around £2.7 billion this year on the value of spending money on holiday and business trips to the EU.

Analysis by Centtrip, which has the first prepaid Mastercard offering 14 currencies on a single card at ‘spread free’ exchange rates, reveals the nation spends around £19.56 billion a year whilst abroad on trips to the EU.  It says if the valuation of sterling against the Euro remains the same this year when compared to two years ago, we could spend £2.7 billion less in 2015 and have more or less the same spending power we did in 2013.  

In total we make around 42.5 million trips to the European Union every year.  Centtrip’s analysis reveals that around 73% of the trips we take abroad are to the EU, and of the £34.9 billion we spend abroad, 56% of this is in the EU.  

However, despite the extra value we now have from the growing strength of Sterling, Centtrip estimates banks and travel money companies make around £698 million in ‘spreads’ when we use our credit, debit and prepaid currency cards abroad, or when we buy foreign currency.  This is because its research reveals that the average FX spread when we use plastic to buy abroad is over 2%.  

Brian Jamieson, Co-Founder and Managing Director, Centtrip said: “Sterling’s strength against the Euro is great news for UK consumers and businesses alike when they visit the EU.  However, we estimate that on average, people pay around £11.9 in FX ‘spreads’ on their spending money per trip whilst abroad.  People need to pay more attention to the ‘charges’ they incur every time they spend or buy something abroad.”    

There is no spread on Centtrip’s new  pre-paid currency card, which means    customers receive the market rate, or the price Centtrip pays for the currency.   

Customers can use Sterling or Euros to load their account via their debit cards or by making a bank transfer.  Thereafter, they can convert across the 14 currencies free of any spread.  

Customers can manage their accounts via a smartphone app or online through a multi-currency travel account.  The card allows customers to carry significantly higher balances compared to £5,000 or £6,000 for most prepaid currency cards.

Customers pay one fixed annual fee of £10 and 0.5% of the value of funds loaded to their account.  Thereafter they can buy foreign currency from Centtrip at authentic 0% rates from the live market, as much as they need and as often as they want.  

New research from financial services research company MoneyComms, which was commissioned by Centtrip, reveals that for the Euro, the average foreign exchange spread on credit cards and debit cards is 2.4% and 2.42% respectively.  For prepaid currency cards, the corresponding figure is 2.59%.  

Looking at four different scenarios for spending between £1,500 and £50,000 in Euros and using ATMs abroad, MoneyComms found for the lowest value example the savings from using Centtrip when compared against the average cost of using UK debit, credit or FX cards was £22.11, £29.97 and £19.6 respectively.  The corresponding savings on its £50,000 Euro scenario were £1,011.9, £1,085.6 and £975.95.  

The research also applied the same scenarios to US Dollar transactions and similar savings from using Centtrip were identified.  

In addition to spread free exchange rates, no charge for point-of-sale transactions in the UK or abroad and competitive international ATM fees, Centtrip’s card also offers the heritage and confidence of the MasterCard brand.  This means it’s accepted at over 34 million locations and 2.1 million ATMs worldwide.

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